Now that 2024 has arrived, many are hoping for a better housing market. Last year saw record-low home sales, one of the worst housing shortages in recent history, and the highest mortgage rates in over twenty years. 

Will this year be any different? And what will it mean for institutional real estate investors? 

1. Low housing inventory persists

Since 2010, the U.S. has had a major housing shortage, which means there have been more buyers than homes for sale. According to a recent estimate, the U.S. must supply around 3.2 million more homes to meet demand. 

Part of the problem is a construction lag. After the 2008 housing crash, many builders built homes at a slower pace to avoid getting stuck with inventory they couldn’t sell (which happened to many leading up to the crash). Plus, recent supply and labor shortages and higher interest rates have made building more expensive. 

The resale market isn’t much better. Last October, existing U.S. homes for sale fell to a 13-year low of 3.79 million. A lot of this had to do with mortgage rates topping 8% for the first time since 2000, pricing many out of the market. But it’s also the result of many homeowners refusing to sell and give up their fixed low-rate mortgages, further constraining housing supply, aka the “lock-in effect.”

Of course, this could change as major life events force more homeowners to sell (e.g. a growing family or a new job requiring owners to move) and if mortgage rates fall …

2. Mortgage rates set to stabilize, maybe even come down

For about 15 years, homebuyers enjoyed average 30-year fixed mortgage rates of below 5%. But that all changed in 2022 when mortgage rates skyrocketed. 

Why? The Federal Reserve started hiking its key interest rate (which serves as the benchmark for all other interest rates, including mortgage rates) in March 2022 to ease rampant inflation (a result of near-zero interest rates during the COVID-19 pandemic). 

However, now that inflation has fallen near the Fed’s target 2% rate, the central bank hasn’t raised interest rates since July, potentially achieving a “soft landing,” i.e. reducing inflation without causing a recession. 

Since their recent October peak, mortgage rates have been coming down. As of 4 January 2024, the average 30-year fixed rate is 6.62%. 

Though it’s impossible to predict where mortgage rates go from here, there’s good reason to believe they could fall. For one, the bond yield curve, which shows the yields of different treasury bonds at various maturity dates (1 month to 30 years) is inverted. This means yields are higher for short-term bonds than for long-term bonds, indicating investors expect interest rates to fall.  

Furthermore, recent surveys show that consumers expect mortgage rates to fall, too.

The consensus among experts is that mortgage rates will decline gradually across 2024, landing somewhere between 6.1% and 6.6% by the end of the year. Most aren’t expecting mortgage rates to go up. If anything, they’ll stabilize, which will at least inject further confidence in homebuyers about where interest rates will be over the next year.

Of course, anything could happen. 

Assuming mortgage rates fall, housing sales could pick up. For one, it would make homes more affordable, bringing more buyers to the market. But it would also help free up existing homes held captive by the lock-in effect, i.e. more homeowners would be willing to sell if they can buy their next house at a lower mortgage rate.

All of this could heat up the housing market.

3. Pent-up housing demand

It’s no secret that many millennials are trying to buy homes. They’re America’s largest generation and entering their prime homebuying years (25 to 45 years old). 

However, compared to previous generations, many millennials are becoming homeowners at later ages or not at all—partly due to the challenging housing market of the last few years. 

Still, the American dream of owning a house is alive and well. According to a recent survey, nearly three-quarters of Americans place owning a home above career, family, and college as a sign of prosperity. 

This means that despite the challenging market and competition from baby boomers competing for the same homes with more cash, many millennials are pushing forward in their goal to buy a home. Those who haven’t yet succeeded only add to the pent-up demand for houses, especially smaller, starter homes.

4. High home prices and low housing affordability for the foreseeable future

Low supply and pent-up demand will likely keep home prices high for the foreseeable future. As of Q4 2023, the median home sales price was $431,000. 

This puts a strain on first-time homebuyers, especially considering the added cost of higher mortgage rates. In fact, home affordability is the worst it’s been since 1984.

The household income required for the median $431,000 home at the current average 30-year fixed rate of 6.62% is nearly $100,000 (assuming the borrower spends only a third of their monthly income on their monthly mortgage payment). 

However, wages haven’t kept up with home prices. According to the Federal Finance Housing Agency, home prices rose 74% from 2010 to 2022, while the average wage rose only 54% during the same period.

To make matters worse, home insurance costs in many coastal markets (e.g. in California and Florida) have gone up. 

Bottom line: High home prices and home affordability will still be major challenges in 2024. 

5. Potential silver linings for real estate investors

That said, every housing market contains investment opportunities. And things are looking up for many investors and consumers.

According to a recent New Western study, 53% of residential real estate investors expect business growth in 2024, and 55% of consumers feel that local investors can help solve the housing shortage.

Here are a few examples of potential silver linings in this year’s housing market:

• Rise of accessory dwelling units (ADUs). Opposition to increasing housing density is a major obstacle to affordable homes, aka not-in-my-backyard (NIMBY). However, many states are loosening zoning regulations to allow a wider variety of residential housing. For example, California and other West Coast states are making it easier to build accessory dwelling units (ADUs) on single-family lots to increase housing supply. Investors can capitalize on this trend by adding properties with ADUs to their portfolios.
• Rise or remote work and coworking spaces. According to the U.S. Census Bureau, the number of people primarily working from home tripled from 5.7% (roughly 9 million people) in 2019 to 17.9% (27.6 million people) in 2021. If this trend continues, the demand for housing outside of urban areas and the demand for coworking spaces inside urban areas may increase. 
• Rise of real estate crowdfunding and private equity funds. As home prices have risen, so has the barrier to entry for real estate investors. This has led to an increase in real estate crowdfunding and private equity funds. These options let you buy shares of properties or property funds to get exposure to residential real estate without the high upfront cost and hands-on management. 

As a real estate investor in 2024, now may be the time to double down on creative investing strategies that take advantage of the rise of ADUs, remote work, and crowdfunding opportunities. 

The post 5 Housing Trends to Watch in 2024 appeared first on ReadWrite.

BlackRock, the world’s largest asset manager, has filed an application with the U.S. Securities and Exchange Commission for an exchange-traded fund that would directly hold Ethereum. The proposed ETF, called the iShares Ethereum Trust, aims to track the price of Ethereum similarly to how the price of gold is tracked by a gold ETF.

The filing comes just months after BlackRock filed for a spot bitcoin ETF, which is still awaiting approval from the SEC. The news was first reported by The Block.

Approval of the Ethereum ETF could be a huge boost for the cryptocurrency, allowing mainstream investors easy access through traditional brokerage accounts. However, the SEC has rejected several bitcoin ETF applications in the past — citing concerns over volatility and potential for manipulation in the underlying crypto markets.

Filing for an Ethereum ETF now suggests BlackRock sees potential for an SEC approval soon. The Ethereum market has matured rapidly, now nearing a $250 billion market capitalization. “There is pent-up interest in crypto from clients,” said BlackRock CEO Larry Fink last month.

Approval of a spot Bitcoin or Ethereum ETF could provide the regulatory clarity needed to unlock significant institutional demand. BlackRock’s size and influence could also help sway regulators toward approval.

The SEC will likely take months to decide on BlackRock’s Ethereum ETF application. For now, the filing signals BlackRock’s confidence in Ethereum’s long-term value proposition and regulatory roadmap.

Ethereum powers decentralized finance applications and non-fungible token platforms, expanding its utility beyond digital money.

Photo by Moose Photos.

The post BlackRock files for spot Ethereum ETF with U.S. regulators appeared first on ReadWrite.

Today’s startup ecosystem is dynamic and competitive. Innovators and entrepreneurs struggle to secure funding to launch their ventures to the next echelon. Traditional paths like venture capital and angel investment are still viable. But Reg A and CF offerings provide practical, accessible, and efficient means to accumulate much-needed capital.

Understanding Reg A and CF Offerings

Instituted by the U.S. Securities and Exchange Commission, Regulation A (Reg A) and Regulation Crowdfunding (Reg CF) offerings allow private companies to raise capital from the general public. This change in fundraising democratizes investment. This lets small-scale investors participate in the financial journeys of growing companies. 

Etan Butler, chairman of Dalmore Group, a leading broker-dealer specializing in Reg A and CF raises, says the choice between these two hinges on “the why behind your raise and the unique goals for your company.”

Choosing Between Reg A and CF

A company leveraging Reg CF can expediently initiate its fundraising campaign. This starts by tapping into a broad base of potential investors with minimal upfront costs. “Reg CF allows you to get started quickly and inexpensively to raise a maximum of $5M from any investor over 18,” notes Butler. Though enticing for its ease and low-cost entry, Reg CF has restrictions.

The one-year waiting period for secondary market transactions does limit the liquidity of the raised capital.

Though more intricate and costly to initiate, Reg A facilitates a large capital influx. This permits companies to raise up to $75M. Butler points out an advantage, “the shares are freely tradable immediately, which gives issuers a path to potential liquidity opportunities.” The immediate tradability of shares increases Reg A’s appeal, providing an expedited avenue for return on investment.

Preparing for a Successful Raise

Embarking on the Reg A or CF journey necessitates a strategic foundation. “The first step is understanding that the success of your raise is dependent on your effectiveness at building an audience around your product or service and then converting that audience into investment interest,” says Butler. A structured, interactive, and engaging community is a peripheral advantage and a core component of a successful raise.

In this context, Butler’s advice pivots towards the operational mechanics of online capital raising. Drawing a parallel to e-commerce, he emphasizes the transactional nature of this venture, wherein the average investment often falls below $1,000 and is facilitated chiefly through mobile credit card transactions. The implication for founders is clear: the platform for raising capital must be ingrained with e-commerce tools adept at capturing and converting digital foot traffic into tangible investment.

Moreover, startups’ success depends on their ability to “connect with a wide mainstream audience of potential investors”. For Butler, the pre-raise phase should be characterized by robust community building. This imbues the process with momentum and could potentially unlock future equity value.

Building a Strategic Community Foundation

Venturing into Reg A or CF offerings isn’t merely a financial endeavor. It is also deeply entrenched in strategic community building, audience engagement, and implementing e-commerce pragmatics. For startups on the edge of expansion, the choice between Reg A and CF is a strategic decision. You must consider immediate financial needs and long-term goals, liquidity prospects, and the intrinsic value of the engaged community.

Navigating this landscape with foresight, precision, and informed strategy morphs these offerings from financial instruments to holistic ecosystems where community engagement, capital influx, and corporate growth coalesce. This drives the startup into its future with both financial and communal capital firmly in tow. It’s about connecting to a wide mainstream audience of potential investors and morphing those connections into a foundational base for sustained growth and innovation.

Tools for Evaluation by Investors

From an investor’s vantage point, the allure lies in the accessibility and potential lucrative returns associated with emerging enterprises. However, it is not without its intricacies. Prospective investors need to harness a keen sense of discernment. They need to meticulously evaluate the startup’s business model, market positioning, and competitive landscape. The evaluation should extend beyond financial projections. It should also encompass the quality of leadership, organizational resilience, and adaptability in a fast-evolving market landscape.

In an era where technology intertwines with every facet of business, the integration of advanced analytics, artificial intelligence, and machine learning can elevate the efficiency and outreach of Reg A and CF campaigns. These technologies enable startups to refine their investor targeting, enhance engagement, and optimize the conversion pipeline. For investors, technology offers tools for thorough due diligence, risk assessment, and informed decision-making.

While Reg A and CF offerings present profound opportunities for raising capital, it’s pivotal for startups to exhibit due diligence in considering their long-term implications and strategic fit. The integration of these offerings into the company’s overarching financial and operational strategy requires attention to detail and strategic foresight.

The Future Outlook

As the startup landscape evolves, the synergy of technology, regulatory innovation, and global investor participation is poised to reshape capital raising. Reg A and CF offerings are not mere alternative funding avenues but are emblematic of a more inclusive, diversified, and dynamic investment ecosystem. 

The future of capital raising is not solely predicated on financial ingenuity. It is equally based in the creation of vibrant, engaged communities of investors and innovators. In this symbiotic ecosystem, value is co-created, risks are mitigated, and opportunities are amplified.

For business owners and investors alike, the emergence of Reg A and CF offerings heralds an era marked by inclusivity, opportunity, and innovation. By harnessing these offerings with strategic acumen, startups can transcend traditional capital constraints. This unleashes a trajectory of sustainable growth and innovation. Endowed with a broader spectrum of opportunities, investors are empowered to partake in the entrepreneurial journey. This contributes to the next wave of business innovation.

In this changing landscape, informed decision-making, strategic alignment, and technological integration emerge as the triumvirate forces moving both startups and investors towards unprecedented horizons of opportunity and growth.

The post Raising Capital For Your Startup Through a Reg A or CF Offering appeared first on ReadWrite.

It can be difficult to remember everything we read online in today’s fast-paced digital world. Whether it’s a noteworthy article, a helpful website, or a pivotal moment from a Zoom meeting, it’s easy for important details to get lost in the shuffle. A16z-funded startup and pioneer in the field of personal data recording, Rewind, has developed an innovative approach to this issue. They have just released a cutting-edge iPhone app that records the user’s Safari browsing sessions, allowing for easy recall of previously visited sites. In this article, we’ll take a closer look at the Rewind app and the company’s dedication to user privacy and data security.

The iPhone app Rewind makes it easy to back up your entire browsing history with one tap. The app automatically records your Safari sessions, so you can continue using the web browser as usual. However, when you use incognito mode, no data about your browsing habits is kept. With Rewind, you can easily keep track of the articles and websites you find while surfing the web.

The robust search capabilities of the Rewind app are one of its most notable features. The content of the websites you visit and the screenshots you take are analyzed and indexed using text recognition technology by the app. This allows you to quickly retrieve information from your browsing history by searching for specific terms or phrases. You can basically use your iPhone as a search engine for everything you’ve ever seen on it.

The Rewind app’s search features have been upgraded significantly with the addition of GPT-4, a cutting-edge natural language processing model. Questions like “Who mentioned Twitter last week?” or “How do I know this person?” are just the beginning of what the app can do for you. The app can then deduce what you’re looking for based on your past searches and web pages viewed. This is a great tool for looking up specific information during your web browsing sessions or recalling specifics from previous Zoom meetings.

Rewind places a premium on user discretion and data safety. The company has several safeguards in place to protect the confidentiality of its customers’ information. Dan Siroker, co-founder of Rewind, claims that users’ recordings are encrypted and stored locally on their devices. Siroker tweeted that the app does not use user data for advertising or to train artificial intelligence models. This dedication to user anonymity is especially important in situations where users are asked to allow the app to track their movements.

In addition, Rewind only records new or altered data between frames, which significantly cuts down on data storage requirements. Power-saving algorithms optimized for Apple hardware are also incorporated into the app to keep battery life to a minimum. Siroker claims that the app used less than 4% of battery life over the course of a day. However, battery life can differ from one person to the next and from one device to another.

The sheer volume of data that would need to be stored makes the development of an app that records web browsing activity difficult. Rewind’s solution is a compression algorithm that reduces the size of raw video recording data by as much as 3,750 times. This means that the user’s browsing history can be easily stored and retrieved without taking up too much room on the user’s iPhone.

Compression technology is useful in more ways than just saving space. The Rewind app is able to rapidly analyze and index compressed data, improving the speed and accuracy of search queries. This guarantees a trouble-free experience, making it possible for users to quickly find the data they require.

Currently, you can download Rewind from the App Store for no cost at all on your iPhone. Nonetheless, the business has introduced paid plans for customers who demand more features. The free plan allows for 50 Rewinds, which is equivalent to one session of browsing or searching. It is also considered a Rewind if you use GPT-4 to ask a question. The startup is so dedicated to providing a useful product that it plans to keep the iOS app free for as long as possible.

In conclusion, the Rewind iPhone app is a major step forward for the technology used to record private data. The app provides a simple means of archiving and retrieving data by recording online activity in secret and facilitating robust search. With the addition of GPT-4 and compression technology, the app has become an essential resource for anyone who values efficiency and information retention in the modern digital age. Rewind has established itself as a dependable and trustworthy solution for managing and recalling web browsing history by placing a premium on privacy and data security.

First reported on TechCrunch

Frequently Asked Questions

What is the Rewind app, and what does it do?

The Rewind app is an iPhone app developed by a startup called Rewind. It allows users to back up their entire browsing history by secretly recording their Safari browsing sessions. Users can easily recall previously visited sites and access important details from their web browsing.

How does the Rewind app work?

The Rewind app automatically records Safari browsing sessions, except when the user is in incognito mode. The app analyzes and indexes the content of websites visited and screenshots taken using text recognition technology, enabling users to search for specific terms or phrases to retrieve information from their browsing history.

What is GPT-4, and how does it enhance the search capabilities of the Rewind app?

GPT-4 is a cutting-edge natural language processing model integrated into the Rewind app. It enhances the search capabilities, allowing users to ask complex questions related to their browsing history or previous activities, making it easier to find specific information quickly.

How does Rewind ensure user privacy and data safety?

Rewind prioritizes user discretion and data safety. The app encrypts and stores users’ recordings locally on their devices. User data is not used for advertising or training artificial intelligence models. This dedication to user anonymity is particularly important when users are asked to allow the app to track their movements.

How does Rewind optimize battery life and data storage requirements?

Rewind uses power-saving algorithms optimized for Apple hardware to minimize battery consumption. The app only records new or altered data between frames, reducing data storage requirements significantly. Additionally, a compression algorithm reduces the size of raw video recording data by up to 3,750 times, saving space and improving data analysis and indexing speed.

How can users access the Rewind app, and what are the pricing options?

Users can download the Rewind app for free from the App Store on their iPhone. The free plan allows for 50 Rewinds, which is equivalent to one browsing or searching session. Paid plans with additional features are available for users who require more extensive usage.

What are the potential benefits of using the Rewind app?

The Rewind app offers a simple and efficient way to archive and retrieve web browsing history, ensuring easy access to previously visited sites and information. Its robust search capabilities, integration of GPT-4, and compression technology make it a valuable resource for managing and recalling web browsing data.

Why is privacy and data security important in an app like Rewind?

Privacy and data security are crucial in apps that record and store users’ browsing history. Users need to trust that their data is protected and not used for unauthorized purposes. Rewind’s commitment to user anonymity and data safety enhances user confidence in using the app.

How does Rewind’s compression technology improve data storage and search speed?

Rewind’s compression technology reduces the size of raw video recording data, saving space and making it easier to store and retrieve browsing history. The app’s ability to rapidly analyze and index compressed data enhances the speed and accuracy of search queries.

What sets Rewind apart from other browsing history recording apps?

Rewind stands out due to its innovative approach to secretly recording Safari browsing sessions and its advanced search capabilities powered by GPT-4. The app’s commitment to user privacy, data security, and efficiency makes it a reliable and trustworthy solution for managing and recalling web browsing history.

Featured Image Credit: Unsplash

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Seattle-based startup Protect AI has recently secured $35 million in funding to expand its groundbreaking platform that protects machine learning code. The company’s software aids businesses in monitoring and safeguarding various components of their machine learning infrastructure. Protect AI primarily focuses on regulated industries such as finance, healthcare, life sciences, energy, government, and technology, helping them mitigate the risks associated with rapid AI adoption.

As the popularity of AI grows in the business world, executives feel compelled to incorporate it into their product lines. However, the rapid adoption of AI systems poses risks for businesses, and Protect AI CEO Ian Swanson stresses the importance of employees keeping up with the technology. A study by KPMG revealed that only 6% of organizations have dedicated teams to evaluate and implement risk mitigation strategies for generative AI, leading to a lack of readiness in protecting AI infrastructure.

With artificial intelligence becoming increasingly prevalent, companies of all sizes face growing cyber attacks. McKinsey and Co. predicts that global spending on cybersecurity services by businesses will reach $100 billion by 2025. Cyber attacks on AI systems can have severe consequences, putting intellectual property and code at risk. Protect AI’s mission is to shield businesses from the catastrophic effects of cyber attacks by identifying and fixing flaws in their machine learning infrastructure.

Protect AI’s flagship product, AI Radar, is a comprehensive system that monitors and protects an organization’s machine learning supply chain. It helps businesses manage and keep track of various components, including operations software, platforms, models, data, services, and cloud hardware. Similar to the routine upkeep of a car, regular inspections and adjustments are necessary to ensure peak efficiency and safety.

The effectiveness of Protect AI’s platform has been proven through its discovery of flaws in widely used platforms such as MLflow. By promptly disclosing its findings, Protect AI compelled MLflow to release a patch for the identified security hole. This real-world scenario emphasizes the importance of monitoring AI systems and implementing preventative measures.

Competing in the rapidly developing field of AI cybersecurity, Protect AI faces stiff competition from well-funded startups like Hidden Layer, Robust Intelligence, and CalypsoAI. However, Protect AI stands out by providing businesses with a comprehensive approach to AI protection, covering the entire machine learning supply chain.

Protect AI’s success is attributed to its talented team, led by CEO Ian Swanson, a seasoned entrepreneur with extensive experience in technology and AI. The company’s funding round was led by Evolution Equity Partners, with participation from existing investors and Salesforce Ventures, raising a total of $35 million. This significant investment positions Protect AI to continue its mission of safeguarding AI and ML software.

As AI becomes increasingly prevalent in the business world, the need for protecting AI and machine learning code from cyber threats becomes paramount. Protect AI’s platform offers a novel approach to address this need, ensuring the security and integrity of AI technologies as they become more important in regulated industries and beyond. With its recent funding, Protect AI is well-equipped to continue its mission of protecting AI systems and assisting businesses in maintaining robust defense against cyber attacks.

First reported on GeekWire

Frequently Asked Questions

What is Protect AI?

Protect AI is a cyber security startup based in Seattle, focused on providing a groundbreaking platform to protect machine learning code. Their software helps businesses monitor and safeguard various components of their machine learning infrastructure.

What industries does Protect AI primarily serve?

Protect AI primarily caters to regulated industries, including finance, healthcare, life sciences, energy, government, and technology. These sectors often face unique risks associated with rapid adoption of AI technologies.

Why is protecting AI infrastructure crucial for businesses?

The rapid adoption of AI poses risks for businesses, making it vital to protect AI infrastructure. Cyber attacks on AI systems can lead to severe consequences, putting intellectual property and code at risk.

What is the significance of the recently secured $35 million funding?

The $35 million funding allows Protect AI to expand its platform and continue its mission of safeguarding AI and ML software. With increased resources, the company can provide comprehensive protection for businesses in a rapidly evolving cybersecurity landscape.

How does Protect AI’s AI Radar work?

AI Radar, Protect AI’s flagship product, is a comprehensive system that monitors and protects an organization’s machine learning supply chain. It helps businesses manage and keep track of various components, ensuring peak efficiency and safety, much like the routine upkeep of a car.

What real-world impact has Protect AI demonstrated?

Protect AI has proven the effectiveness of its platform by discovering flaws in widely used platforms like MLflow. The company’s prompt disclosure of these findings led to the release of patches, emphasizing the importance of monitoring AI systems and implementing preventative measures.

How does Protect AI differentiate itself from competitors?

Protect AI stands out in the competitive AI cybersecurity field by offering businesses a comprehensive approach to AI protection. The company covers the entire machine learning supply chain, empowering businesses with robust defense against cyber attacks.

Who leads Protect AI?

Protect AI is led by CEO Ian Swanson, a seasoned entrepreneur with extensive experience in both technology and artificial intelligence. His leadership and expertise have contributed to the success and growth of the company.

What future developments can we expect from Protect AI?

With the recent funding, Protect AI is well-equipped to continue its mission of safeguarding AI systems. As AI becomes more prevalent in the business world, the company is likely to advance its platform to address emerging cyber threats and protect the integrity of AI technologies.

How can businesses benefit from Protect AI’s platform?

By leveraging Protect AI’s platform, businesses can ensure the security and integrity of their AI and machine learning code. The comprehensive protection offered by Protect AI enables businesses to mitigate the risks associated with cyber attacks and adopt AI technologies with confidence.

Featured Image Credit: Unsplash

The post Protect AI Raises $35 Million to Safeguard Machine Learning Code appeared first on ReadWrite.

The world of fintech has experienced significant growth and transformation in recent years, and Latin America (LatAm) has emerged as a key player in this rapidly evolving industry. Despite a global funding slump in the second quarter of 2023, the region has managed to maintain a steady upward trajectory, attracting international investor interest and witnessing a surge in venture funding. In this article, we will delve into the state of fintech in Latin America, exploring the region’s growing influence, notable startups, and the factors contributing to its success.

Latin America has become a hotbed for fintech innovation, with the region witnessing a substantial increase in venture funding in recent years. According to The Association for Private Capital Investment in Latin America (LAVCA), VC investors deployed $7.8 billion across a record 1,114 deals in Latin America in 2022, making it one of the most attractive destinations for fintech investment. The fintech sector, in particular, accounted for 29% of investments, highlighting its dominance in the region.

The surge in global investor interest in Latin American startups has played a vital role in driving the growth of the fintech industry in the region. Investors worldwide have recognized Latin America’s immense potential and opportunities, leading to a substantial influx of capital. This increased interest has not only boosted the profile of Latin American fintech startups but has also contributed to the overall growth and development of the ecosystem.

According to CB Insights’ State of Fintech Q2 report, fintech in Latin America and the Caribbean drew $500 million in the second quarter of 2023, marking a remarkable 150% increase compared to the previous quarter. While the deal count remained relatively stable, the region’s early-stage deal share reached a five-year high of 81%, indicating a strong focus on nurturing and supporting emerging fintech startups.

During the second quarter of 2023, several notable deals occurred in the Latin American fintech landscape. One of the most significant investments went to Cayman Islands-based DeFi platform Kross Wallet, which raised a staggering $100 million in a seed round. This substantial funding round reflects the growing interest in decentralized finance and its potential for transforming the financial landscape in Latin America.

Other notable deals included a $60 million raise for Mexico-based spend management startup Clara and a $26 million investment in Brazilian payments infrastructure company Liquido. These deals highlight the diversity and innovation within the Latin American fintech ecosystem, showcasing the region’s ability to attract significant investments across various industry segments.

While the fintech sector in Latin America has witnessed impressive growth, the second quarter of 2023 was not kind to payments startups. Funding to these companies plummeted by 75% during the quarter, reaching a six-year funding low of $2 billion. Despite this setback, there were a few bright spots, with early-stage funding for payments companies reaching a five-year high.

One standout company in the payments space is Tipalti, an accounts payable automation platform for mid-market companies. Tipalti secured the top equity deal for the quarter, raising $150 million in a growth round. This investment adds to the company’s impressive list of funding achievements, including a $270 million Series F and a $150 million Series E. Tipalti’s success showcases the immense potential for disruptive payment solutions in Latin America and highlights the growing interest in financial automation and efficiency.

In the second quarter of 2023, all five IPO exits within the fintech industry came from companies based outside of the United States, with the majority originating from Asia. This global trend underscores the increasing importance of international fintech markets and their opportunities for investors and startups alike. According to CB Insights, the Latin American fintech sector experienced a 20% drop in M&A activity, with 142 exits reported during the quarter.

Despite the challenges faced by payment startups and fluctuations in funding, the future of fintech in Latin America remains promising. The region’s ability to attract global investor interest and its growing ecosystem of innovative startups position Latin America as a key player in the global fintech landscape.

To ensure continued growth and success, Latin American governments and regulatory bodies must provide a supportive environment for fintech innovation. By implementing favorable policies and frameworks, governments can foster collaboration between traditional financial institutions and fintech startups, leading to mutually beneficial partnerships that drive innovation and financial inclusion.

Latin America has already demonstrated its appetite for technology and innovation, with the fintech sector at the forefront of this transformation. As technology advances, Latin American startups can leverage emerging technologies such as blockchain, artificial intelligence, and open banking to revolutionize the region’s financial services landscape. By staying at the forefront of technological advancements, Latin America can continue to attract investment and drive innovation in the fintech industry.

One of the key drivers of fintech growth in Latin America is the focus on financial inclusion and empowerment. By leveraging technology and innovative business models, fintech startups in the region are bringing financial services to underserved populations, providing access to banking, payments, and investment opportunities. This focus on inclusivity and empowerment has the potential to transform the lives of millions of people in Latin America, bridging the gap between traditional financial services and the unbanked or underbanked.

In summary, Latin America has emerged as a force to be reckoned with in the fintech industry, attracting global investor interest and witnessing a surge in venture funding. Despite the challenges faced by payment startups, the region continues to foster innovation and drive technology adoption in the financial services sector. With a supportive regulatory environment, a focus on technology and innovation, and a commitment to financial inclusion, Latin America is poised to shape the future of fintech globally. As the fintech ecosystem in Latin America continues to evolve, it will be exciting to see how the region’s startups and investors collaborate to drive the next wave of innovation and transformation in the industry.

First reported on TechCrunch

Frequently Asked Questions

Q. How has Latin America emerged as a key player in the fintech industry?

Latin America has experienced significant growth in the fintech sector, witnessing a substantial increase in venture funding and attracting global investor interest. The region’s fintech industry accounted for 29% of investments, making it one of the most attractive destinations for fintech investment.

Q. What is the state of venture funding for fintech in Latin America?

In 2022, VC investors deployed $7.8 billion across 1,114 deals in Latin America. Additionally, fintech in Latin America and the Caribbean raised $500 million in the second quarter of 2023, marking a remarkable 150% increase compared to the previous quarter.

Q. How are global investors contributing to the growth of fintech in Latin America?

Global investors have recognized Latin America’s immense potential and opportunities, leading to a substantial influx of capital into the region’s fintech startups. This increased interest has not only boosted the profile of Latin American fintech startups but also contributed to the overall growth and development of the ecosystem.

Q. What notable deals have taken place in Latin America’s fintech landscape?

During the second quarter of 2023, notable deals included a $100 million seed round for DeFi platform Kross Wallet, a $60 million raise for Mexico-based spend management startup Clara, and a $26 million investment in Brazilian payments infrastructure company Liquido.

Q. What challenges have payments startups faced in Latin America?

In the second quarter of 2023, funding for payments startups in Latin America plummeted by 75%, reaching a six-year funding low of $2 billion. Despite this setback, there were positive indicators, with early-stage funding for payments companies reaching a five-year high.

Q. How is Latin America driving financial inclusion through fintech?

Fintech startups in Latin America are leveraging technology and innovative business models to bring financial services to underserved populations, bridging the gap between traditional financial services and the unbanked or underbanked. This focus on inclusivity and empowerment can potentially transform the lives of millions of people in the region.

Q. What role do Latin American governments play in fostering fintech innovation?

To ensure continued growth and success, it is crucial for Latin American governments and regulatory bodies to provide a supportive environment for fintech innovation. Implementing favorable policies and frameworks can foster collaboration between traditional financial institutions and fintech startups, driving innovation and financial inclusion.

Q. How can technology advancements further boost fintech growth in Latin America?

As technology advances, Latin American startups can leverage emerging technologies such as blockchain, artificial intelligence, and open banking to revolutionize the region’s financial services landscape, attracting more investment and driving innovation in the fintech industry.

Q. What is the outlook for fintech in Latin America?

Despite challenges faced by payments startups, Latin America’s fintech sector remains promising due to its ability to attract global investor interest and focus on financial inclusion. The region’s growing ecosystem of innovative startups positions Latin America as a key player in the global fintech landscape.

Featured Image Credit: Clay Banks; Unsplash; Thank you!

The post Fintech Funding in LatAm & Caribbean Soars: Payments Take a Dive appeared first on ReadWrite.

First reported on TechCrunch

Frequently Asked Questions

Q. Who are the founders of Big Sky Capital?

Big Sky Capital was founded by Jahn Karsybaev and Adil Nurgozhin. They crossed paths while studying at the University of Montana and later channeled their entrepreneurial spirit into the world of venture capital.

Q. What is the focus of Big Sky Capital’s investment strategy?

Big Sky Capital focuses on enterprise SaaS startups and aims to bridge the gap between promising ideas and sustainable businesses. The firm provides financial support, mentorship, and access to a network of industry experts to startups in their earliest stages.

Q. How did Big Sky Capital approach fundraising for its venture capital fund?

Karsybaev and Nurgozhin initially encountered challenges in educating potential limited partners (LPs) about venture capital investment. They adjusted their approach, taking on the role of educators to explain the benefits and opportunities of venture capital, which extended the fundraising timeline but proved crucial in securing capital commitments.

Q. What sectors does Big Sky Capital invest in?

Big Sky Capital invests in diverse sectors, including health technology, cybersecurity, and fintech. The firm is particularly interested in health tech, aiming to contribute to innovation in the healthcare industry and cybersecurity, recognizing the importance of addressing cyber threats.

Q. What is the global outlook of Big Sky Capital?

Despite being based in Miami, Florida, Big Sky Capital has a global outlook. The founders have established a presence in multiple countries, including the United States, Kazakhstan, and Singapore, to tap into unique investment opportunities and build a global network of entrepreneurs and investors.

Q. What is the primary focus of Big Sky Capital’s Fund I?

Fund I focuses on companies in their earliest stages, including pre-revenue ones. The firm writes checks ranging from $250,000 to $500,000 to provide startups with the necessary resources for growth.

Q. What are some notable portfolio companies of Big Sky Capital?

Big Sky Capital’s portfolio comprises 12 companies, including Clockster, Pippin, and Swaypay. These startups operate in various sectors, reflecting the firm’s diverse investment approach.

Q. How does Big Sky Capital support immigrant founders?

The founders of Big Sky Capital, both immigrants from Kazakhstan, prioritize investing in immigrant founders based on their own experiences. They understand immigrant entrepreneurs’ unique challenges and offer comprehensive support and mentorship to help them succeed.

Q. What are Big Sky Capital’s goals for the future?

Big Sky Capital aims to drive innovation, nurture entrepreneurship, and create a thriving startup ecosystem. With the launch of Fund I and a growing portfolio, the firm is well-positioned to make a significant impact in the world of venture capital and shape the future of the tech industry.

Featured Image Credit: Karen Uppal; Unsplash; Thank you!

The post Big Sky Capital: Investing in the Future of SaaS Startups appeared first on ReadWrite.

Qualtrics, the cloud-based platform for managing online customer experiences, has announced plans to invest $500 million in AI over the next four years. This significant investment comes alongside the launch of its new AI-integrated platform, XM/os2, which aims to revolutionize enterprise experience management. In this article, we will explore the rise of generative AI investments, delve into the details of Qualtrics’ ambitious plans, and examine the potential impact of generative AI on the global economy.

Qualtrics’ investment in AI is part of a larger trend in the tech industry, with leading companies recognizing the transformative power of generative AI. Salesforce Ventures, the venture capital division of Salesforce, has pledged to invest $500 million in generative AI startups, while Sapphire Ventures has set aside over $1 billion for enterprise AI startups. Workday, a prominent HR and finance software company, recently added $250 million to its existing venture capital fund specifically to support AI and machine learning startups. Even Amazon Web Services (AWS) has joined the movement, launching a $100 million program to fund generative AI initiatives.

This influx of capital into the generative AI space demonstrates the growing importance and potential of this technology. Companies across industries are recognizing the value of AI-driven solutions and are willing to invest heavily to stay ahead of the curve.

Qualtrics’ AI investment coincides with the launch of its new platform, XM/os2. This next-generation platform integrates generative AI solutions tailored to enterprise experience management use cases. With XM/os2, Qualtrics aims to bring the power of AI to every part of their platform, enabling organizations to gain deeper insights and make data-driven decisions.

Qualtrics CEO Zig Serafin emphasized the significance of this innovation, stating that it is the most important advancement in experience management since the category was introduced in 2017. By integrating generative AI throughout their platform, Qualtrics aims to enhance the customer experience, improve operational efficiency, and drive business growth.

Qualtrics’ investment highlights the crucial role that innovation plays in the field of experience management. As customer expectations evolve, businesses must continuously adapt to meet their needs. By leveraging AI technology, Qualtrics aims to provide organizations with the tools they need to excel in this rapidly changing landscape.

While Qualtrics has announced its intention to invest $500 million in AI over the next four years, specific details regarding the allocation of funds and internal initiatives remain unclear. It is yet to be determined how the investment will be divided among different business divisions and which specific projects it will support. Further clarification from Qualtrics is sought to shed light on these matters.

The investment in generative AI by Qualtrics and other tech giants reflects the immense potential of this technology to transform industries and drive economic growth. McKinsey estimates that generative AI could add $4.4 trillion annually to the global economy, equivalent to adding a new country the size and productivity of the U.K. to the world. This staggering figure underscores the far-reaching impact that AI can have on businesses and societies.

However, it is important to approach the AI boom with caution. Some strategists warn that the hype surrounding AI may not translate into massive profits, drawing parallels to the tech bubble of the 1990s. While the potential for growth is immense, careful planning and strategic implementation will be essential to realize the full benefits of generative AI.

In summary, Qualtrics’ $500 million investment in AI is a testament to the transformative power of generative AI in the field of experience management. As companies recognize the potential of AI-driven solutions, we can expect to see continued investment and innovation in this space. The launch of XM/os2 and the integration of generative AI throughout the Qualtrics platform demonstrate their commitment to providing cutting-edge solutions to their customers.

However, as with any emerging technology, it is crucial to approach AI with a balanced perspective, understanding both its potential and limitations. By leveraging the power of AI responsibly and strategically, businesses can unlock new opportunities, enhance customer experiences, and drive sustainable growth in the digital age.

First reported on TechCrunch

Frequently Asked Questions

Q. How does Qualtrics’ investment in AI compare to other tech companies’ investments in generative AI?

Qualtrics’ investment of $500 million in AI aligns with other leading tech companies’ commitments to generative AI. Companies like Salesforce Ventures, Sapphire Ventures, Workday, and Amazon Web Services (AWS) have also pledged significant funds to support AI and machine learning startups, indicating the industry-wide recognition of AI’s transformative potential.

Q. What are some key features of Qualtrics’ new AI-integrated platform, XM/os2?

Qualtrics’ XM/os2 platform is designed to revolutionize enterprise experience management by integrating generative AI solutions. It aims to bring AI-powered insights and data-driven decision-making to every aspect of the platform. XM/os2’s AI capabilities are tailored to address various enterprise experience management use cases, such as improving customer experiences, enhancing operational efficiency, and driving business growth.

Q. How does Qualtrics’ CEO, Zig Serafin, view the significance of XM/os2 and the integration of generative AI?

Zig Serafin, Qualtrics’ CEO, views XM/os2 and the integration of generative AI as a groundbreaking advancement in experience management. He believes it is the most important development in the field since the introduction of the experience management category in 2017. This highlights the company’s commitment to leveraging AI technology to provide organizations with the tools they need to excel in a rapidly evolving business landscape.

Q. What are some potential areas where Qualtrics may allocate its $500 million investment in AI over the next four years?

While specific details of the investment allocation remain unclear, Qualtrics’ $500 million investment in AI is likely to support various internal initiatives related to AI development. It may be divided among different business divisions and projects aimed at enhancing the AI capabilities of the XM/os2 platform, expanding AI-driven solutions, and furthering research and innovation in the AI domain.

Q. What are some of the potential economic implications of the AI investments made by companies like Qualtrics?

The investments made by companies like Qualtrics in AI have the potential to drive significant economic growth and transform industries. McKinsey estimates that generative AI alone could contribute $4.4 trillion annually to the global economy, reflecting the vast impact of AI on businesses and societies. This infusion of AI-driven innovation and efficiency can lead to increased productivity, new business opportunities, and job creation, similar to adding a country the size and productivity of the U.K. to the world economy.

Q. How can companies balance the potential of AI with the need for responsible implementation?

To balance the potential of AI with responsible implementation, companies must prioritize ethics, data privacy, and transparency in AI development. Striking a balance between AI’s transformative capabilities and the ethical use of data is crucial in gaining public trust and avoiding unintended consequences. Additionally, investing in AI expertise, responsible AI governance, and continuous monitoring are essential steps to ensure AI technologies are deployed responsibly and for the benefit of society as a whole.

Featured Image Credit: Unsplash

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Abhay Parasnis, a former Adobe CTO, launched Typeface, an enterprise-focused generative AI firm, in 2022. Typeface’s goal was to provide marketers with scalable, tailored content using the power of generative AI. The company soon gained traction, drawing in clients from the Fortune 500, forming strategic alliances with industry leaders like Salesforce and Google Cloud, and, most importantly, collecting substantial funding. The astounding $1 billion valuation of Typeface is the result of a recently completed $100 million Series B fundraising round spearheaded by Salesforce Ventures. Typeface’s expansion goals will be fueled by this cash, allowing them to refine their platform and increase their staff size to cater to the needs of large businesses.

There are three main parts of the Typeface platform that work together to meet the specific needs of business content creation:

1. Typeface’s “content hub” is a single storage space for all brand assets and style guides used in creating consistent text and visuals. Businesses can keep their content on-brand by enforcing internal guidelines.
2. Artificial intelligence is used to train and customize material so that it sounds and reads like the brand it represents. Typeface helps businesses improve brand engagement and customer retention through the use of sophisticated algorithms that help them produce content that speaks directly to their demographic.
3. Typeface’s Flow feature provides prebuilt workflow templates that can be used with your current software. This function simplifies the content-making procedure, enabling workers to effectively produce on-brand material within the context of their existing workflows.

Together, these three elements make up Typeface, a suite of secure, self-serve tools for businesses that enables workers of all ranks to produce appealing, personalized content at scale.

Typeface stands apart among the many generative AI firms by putting a premium on brand control, content safety, and user privacy. Parasnis claims that Typeface’s platform offers personalized AI models for each user, keeping their information and transactions safe. This dedication to brand governance allays fears about copyright infringement claims and other legal hurdles encountered by other AI solutions. The legal concerns associated with using Typeface are reduced because consumers retain full control of all content created there.

There is no denying the growing interest in generative AI as more companies see its value. 25% of business owners are utilizing or testing generative AI tools at the moment, while the remaining 65% aim to do so within the next 12 months, per a survey by FreshBooks. Investments by venture capital firms in generative AI have also been on the rise recently. From 2018’s $408 million, venture capitalists poured $4.5 billion into generative AI in 2022. The industry’s optimism for the future of generative AI has translated to a rise in both angel and seed deals.

Typeface plans to swiftly grow its platform and consistently innovate to fulfill the individual demands of its customers in response to the high demand for personalized generative AI in organizations. Typeface’s recent $100 million fundraising round will be used to accelerate the company’s product road map and increase its market presence. The business intends to improve its offering by recruiting highly skilled professionals with backgrounds in artificial intelligence, SaaS, and business promotion.

Typeface transforms the way businesses distribute content by enabling easy generation of customised content across all customer touchpoints. The firm has established itself as an industry leader in generative AI thanks to its dedication to innovation, brand control, and content safety.

First reported on Tech Crunch

The post Game-Changer Alert: Typeface Raises Whopping $100M Funding to Revolutionize Brand AI, Valued at $1B appeared first on ReadWrite.

Despite the convenience of commission free brokerages, retail investors are still hitting a roadblock when it comes to participating in the stock market. I conducted a survey of 100 active investors, and the result showed that a lack of time to research stocks, insufficient funds, and limited knowledge are the top reasons preventing them from investing more frequently. These challenges represent the last mile of retail investing, a critical hurdle that keeps many people from participating in the market.

The Evolution of Retail Investing

Commission Free Trading: Robinhood revolutionized investing for Millennials and Gen Z, offering a user-friendly platform for easy and affordable stock market participation. The app’s commission-free trades and user-friendly design have shattered traditional barriers such as high fees and minimum requirements. This allows even novice investors to participate in the market.

Diversification: ETFs, or exchange-traded funds, have gained immense popularity in recent years as investors seek more efficient and diversified ways to invest in the stock market. These funds are similar to mutual funds, but trade on an exchange like a stock. The number of ETFs worldwide grew from 276 in 2003, up to 8,754 in 2022.

Lower management fees: Robo-advisors have disrupted traditional fund management by offering a low-cost alternative. Robo-advisors have made it easier for novice investors to access professional-level investment management services. Compared to traditional human advisors who charge a management fee of 1-2% per year, robo-advisors charge a fee of 0.25-0.5%, making them a more affordable option for investors.

Social investing: In recent years, there has been a rise in social/meme investing. This is characterized by individual investors using social media to discuss and promote certain stocks or investment ideas. This trend gained momentum during the pandemic and has continued to grow, fueled by Reddit and Twitter. This has led to the creation of new investing subcultures and has been credited with driving up the value of certain stocks, most notably GameStop and AMC.

Pandemic Spurs 10 Million New Retail Investors

According to a survey by Charles Schwab, a large portion of retail investors began investing during the COVID-19 pandemic. The survey found that 15% of new investors surveyed started investing in 2020, with 45% of them being millennials. The pandemic-induced market volatility, along with stimulus checks and increased time spent at home, encouraged many to enter the stock market. The survey also revealed that these new investors tend to be more engaged and trade more frequently than experienced investors. However, many also lack knowledge and experience and may need education and guidance to make informed investment decisions.

The Next Big Wave

In the next decade, a substantial transfer of wealth is expected as baby boomers pass their wealth to heirs. Estimates suggest that the total amount of wealth to be transferred could hit 84 trillion in just 10 years. This is due to an aging population and the relatively high levels of wealth held by baby boomers.

According to a study, 75% of heirs plan to fire their financial advisors the same day they receive their inheritance. This is largely due to a lack of connection and trust with the previous advisor, as well as a desire for a fresh start and a new perspective on their inherited wealth.

How to Attract Investors and Capture Trillions of Dollars in Wealth Transfer?

My survey revealed that people want to have some level of control over their investments. But the problem is, they can’t always do that when they invest in ETFs or Robo-advisors. Furthermore, many individuals don’t have the time to research individual stocks or a lot of money to invest.

Here’s how we can solve this last mile of retail investing: granting investors the option to select a theme, such as “renewables,” rather than individual stocks like Tesla. They can then invest in dollar amounts using dollar cost averaging, eliminating the need to concern themselves with the number of shares to purchase. This approach empowers investors to exercise greater control over their investments, without the requirement for extensive research or a significant upfront investment.

Companies to Keep an Eye On

Public.com is a social investing app that aims to make the stock market more accessible and collaborative for all. With their new feature, Investment Plans, users can create baskets of stocks and set up recurring contributions. However, users are still responsible for researching and building their own baskets, which can be a tedious task.

Alinea is an investment platform that allows users to pick a premade basket, known as “playlist.” You can create, copy, or share playlists, fostering a social and collaborative investing experience. Although it is important to exercise caution to prevent inexperienced individuals from inadvertently influencing investment decisions.

Share Invest is a mobile and web app that empowers investors to pick premade themed baskets of stocks, known as “Strategies.” This frees investors from the hassle of individual stock research. With the option to set up recurring contributions as low as $5 per week, it’s like having a personalized piggy bank that aligns with your investment goals. As an SEC registered investment advisor, Share provides investors with added peace of mind.

The post Solving The Last Mile of Retail Investing appeared first on ReadWrite.

Venturing into the dynamic realm of Cryptocurrency Investing? Cryptocurrencies like Bitcoin have surfaced as a lucrative yet perilous asset class over the decade, offering immense potential returns. But, without the right expertise and tactics, crypto investment can prove daunting and hazardous.

This article equips you with the necessary means to thrive in the dynamic universe of cryptocurrencies, encompassing technological comprehension, investment objectives, and exchange selection. Regardless of your proficiency level, it offers solid groundwork to venture into cryptocurrency investments confidently.

Factors to Consider Before Investing

While the potential for high returns is certainly appealing, it’s also important to consider the risks involved. Here are a few factors to consider before taking the plunge:

• Market Volatility

The paramount aspect to contemplate prior to investing in cryptocurrency is the market’s volatility, notorious for wild price swings within hours. Although this presents opportunities for high returns, the risk involved demands that you ensure comfort with potential gains and losses.

• Liquidity

In cryptocurrency evaluation, liquidity assumes crucial significance, as it measures the ease of exchangeability. A high level of liquidity indicates abundant buyers and sellers in the market, promoting swift buying and selling activities. Conversely, a low level of liquidity may lead to obstacles in buying or selling, thereby impeding the leveraging of price movements or exiting positions.

• Adoption

Adoption refers to the degree to which merchants, consumers, and other market participants accept and use a cryptocurrency. Generally speaking, cryptocurrencies with high adoption rates are more likely to have stable prices and long-term value. Before investing in a cryptocurrency, research its adoption rates and consider whether it has the potential to gain wider acceptance in the future.

• Security

When venturing into cryptocurrency investments, security stands as a crucial element. The storage of digital assets on a blockchain exposes them to threats of hacking and theft. It’s wise to engage a trusted exchange or wallet provider who values security and to stay vigilant of prevalent security hazards such as phishing and malware attacks.

• Regulation

It is crucial to contemplate the regulatory milieu of a cryptocurrency. The acceptance or prohibition of cryptocurrencies varies by country, and regulation changes can significantly influence prices. Hence, be mindful of regulatory risks before investing.

Setting Investment Goals and Strategies

Investing in cryptocurrency can be a wild ride, with unpredictable market fluctuations and new coins popping up left and right. But by setting clear goals and strategies, you can approach your investments with confidence and intentionality.

Prioritize investment objectives. Swift gains or long-term growth? Specific ROI or accumulation of cryptocurrency? Set clear goals to tailor investment strategies accordingly.

Next, choose your investment strategies. One popular approach is dollar-cost averaging, which involves investing a set amount of money at regular intervals, regardless of market conditions. This can help mitigate the risk of buying in at a high price and take advantage of buying opportunities during market dips.

A viable tactic is HODLing, an acronym for “hold on for dear life.” It entails purchasing and retaining a cryptocurrency for the future, irrespective of interim market oscillations and is a wise choice for investors who have faith in a coin’s long-term prospects.

The limited investment strategies cited herein merely serve as illustrations. Optimal alignment with your goals and risk tolerance, combined with dynamic adaptability to market changes, is the crux of strategy selection.

Remember, setting investment goals and strategies is just one piece of the puzzle regarding successful cryptocurrency investing. It’s important to do your research, diversify your portfolio, and stay up-to-date with the latest news and trends in the market.

For a deeper dive into cryptocurrency investing, check out this post.

Choosing a Cryptocurrency Exchange

Amidst numerous exchanges, determining the apt one for your needs could be perplexing. Here are pivotal aspects to ponder upon while selecting a cryptocurrency exchange:

Step 1: Consider Your Needs

Prior to commencing the comparison of exchanges, it’s crucial to assess your requisites. As a novice, do you seek a user-friendly interface, or do you require advanced functionalities as an adept one? Is your preference for a particular cryptocurrency or a diverse range of assets? Pinpointing your needs can limit your choices and enable you to find an exchange that fulfills your prerequisites.

Step 2: Evaluate Security Measures

The paramount concern in selecting a cryptocurrency exchange is ensuring robust security measures. Look for an exchange that employs robust security measures, such as two-factor authentication, cold storage, and insurance coverage. You should also check the exchange’s track record regarding security breaches and how they handle them.

Step 3: Assess Fees and Payment Options

Differences in exchange fees and payment methods necessitate thorough research to identify an exchange with clear and fair fees. Assessing the impact of payment options, such as credit cards, bank transfers, and PayPal, on your overall expenses is critical.

Step 4: Check for Liquidity

Liquidity refers to the ease of buying and selling cryptocurrencies on an exchange. A highly liquid exchange will have a large number of buyers and sellers, making it easier to execute trades quickly and at a fair price. Check the exchange’s trading volume and order book depth to assess its liquidity.

Step 5: Research Reputation and Customer Support

Lastly, it’s important to research an exchange’s reputation and customer support. Look for user reviews and ratings online, and check whether the exchange has a responsive and helpful customer support team.

Portfolio Management

Diversification is key when it comes to portfolio management in the crypto world. Rather than putting all your eggs in one basket, you want to spread your investments across different cryptocurrencies. Facilitating risk reduction and optimizing potential gains.

When choosing which cryptocurrencies to invest in, consider factors like market capitalization, adoption rate, and use cases. Look for projects with strong teams, clear roadmaps, and a solid community. And remember: diversification doesn’t just mean investing in different coins. It can also mean investing in different sectors of the crypto market, like DeFi, gaming, or NFTs.

Once you’ve built a diversified portfolio, it’s important to rebalance it regularly. Rebalancing involves selling some of your investments in assets that have appreciated in value and using the profits to buy more of the assets that have lagged behind. This helps to maintain your desired allocation and avoid overexposure to any one asset.

Rebalancing can be done on a regular schedule, like once a quarter or once a year. Alternatively, you can set up automated triggers based on specific criteria, like a certain percentage change in value. Whatever method you choose, make sure to stick to your plan and resist the urge to make emotional, reactive decisions based on short-term market movements.

Staying Up-to-Date with the Crypto Market

Here are some tips for staying informed and staying ahead:

• Follow Crypto News Sites

Amidst the profusion of crypto news sites, discerning trusted sources furnishing timely and precise information is crucial. Prominent portals comprise CoinDesk, Cointelegraph, and CryptoSlate.

• Join Crypto Forums

Forums are a great way to connect with other crypto enthusiasts and stay up-to-date with the latest news and trends.

• Follow Crypto Influencers on Social Media

It’s a great way to stay informed about the crypto market, as many influencers and experts share their thoughts and insights on Twitter, LinkedIn, and other platforms.

• Attend Crypto Conferences and Meetups

Attending crypto conferences and meetups is a great way to network with other investors and stay informed about the latest trends and developments in the crypto space. 

• Keep an Eye on Regulatory Developments

This can have a big impact on the crypto market, so staying informed about any new laws or regulations coming down the pipeline is important.

By adhering to these pointers, you’ll be up-to-date on the newest crypto market trends and make well-informed investment choices. Keep in mind to research on your own and avoid overinvesting. Enjoy the investment journey!

Conclusion

Cryptocurrency investment is profitable yet risky. Learn its basics, set goals and strategies, choose a reliable exchange, diversify your portfolio, and stay updated on trends to minimize risk and maximize returns. With ever-evolving opportunities and challenges, crypto investment is for all. Seize the future, invest smartly, and join the millions in this thrilling world.

Featured Image Credit: Maxim Hopman; Unsplash; Thank you!

The post Crypto Investing 101: Tips and Strategies for Maximizing Your Returns appeared first on ReadWrite.

Financial statements are important to have in any transactional activities involving money. Hence, whether running a non-profit organization or a for-profit business, it’s best to prepare financial statements. Creating a financial statement works well for your accounting and accountability. It helps you keep tabs on your progress, year in and year out. The objective of this article is to compare and contrast the non-profit financial statement and statements that are for for-profit organizations.

Revenue

The revenue-related difference between a non-profit and a for-profit financial statement hinges on the “matching principle.” The matching principle applies to the financial statements of for-profit organizations. Based on this principle, for-profit organizations must report their revenue along with the associated cost in the same accounting period.

For example, granted that an organization recorded revenue for December, the cost of goods for that same month must also be inputted in the financial statement. But this is not usually the case for non-profits, where donors may make a pledge to be redeemed later. Let’s consider a scenario where a donor pledges US$2,500 to be remitted in four installments over two years — meaning US$1,250 per year.

The non-profit organization must record the whole US$2,500 in the year the pledge was made to it. This is despite not having received the cash — it must be reflected in your statement anyway. So, when the cash is eventually paid, it goes into the account without changing the financial statement.

Taxes

A major difference between the financial statement of non-profit and for-profit organizations is the tax report. It is generally expected that while the financial statement of a for-profit organization reflects its tax returns, the financial statement of a non-profit does not. Non-profits are primarily known to enjoy tax exemption, but this is after certain obligations have been fulfilled with the right quarters.

That said, there are instances where non-profits are expected to make known their tax returns in the financial statement. It should not go without saying that the financial statement of a non-profit organization may sometimes be complicated. The tax report of a non-profit is often considered in relation to what issues the non-profit is established to address.

For instance, a non-profit that provides disaster relief is not expected to pay tax on donations received for such (humanitarian) causes. However, the organization will be required to pay tax and report the same if other revenue-generation aspects are adopted. A good example of such aspects is doing a crafts workshop to raise funds during Giving Season.

Besides this, non-profit organizations are expected to remit payroll tax to the government, even as their employees have to pay income tax. All these taxes can be recorded in the financial statement of a non-profit organization.

Balance Sheet

In the case of a balance sheet — there is a variation in the name by which this very financial instrument (balance sheet) is known as far as the non-profit is concerned. At the same time, it is alright for for-profit organizations to term it a “balance sheet,” non-profit organizations would always prefer to call it a “statement of financial position.” That aside, another area of differentiation is asset distribution to shareholders.

As it were, non-profits can only have board members and not shareholders. Hence, the statement of financial position of non-profit organizations does not show assets distributed as retained earnings to shareholders. But the balance sheet of for-profit organizations does have such asset distribution declaration. It is, however, possible to have the assets of non-profits reinvested to actualize its charitable mission in subsequent (financial) years.

Income Statement

The income statement is another tool to distinguish a for-profit organization’s financial statement from a non-profit. It follows that for-profit organizations are known to record all that pertains to their expenses, revenue, profit, and loss in the income statement. However, this is different for non-profits — which are not established to make a profit.

Rather what you will see for non-profits is the statement of activities — which can be reported in the financial statement. This statement shows the changes in a non-profit’s net assets in association with the expenses and donations received during the year. With this instrument, non-profit organizations can focus on their missions for the future.

Financial Reporting

The financial statements of non-profit and for-profit organizations are prepared with a focus on specific attributes. While non-profits are more particular about accountability, for-profit organizations are more concerned about profitability. This status is well reflected in the issue of restricted and unrestricted funds. For-profit organizations are not restricted from spending funds for business processes how they deem fit for profit-making, but that is not the case with non-profits.

Occasions exist where grantors will determine how and when non-profit organizations should spend certain donations. In such scenarios, the financial statement must reflect undeniable accountability. To this end, the non-profit is expected to classify the donations that come into its coffers to ensure proper tracking. The appropriate tracking will prevent the organization from muddling things up with funds that are to be spent on the cause for which the business was set up in the first place.

The financial reporting system of a non-profit organization may be more complicated than a for-profit organization due to the multiple rounds of restricted funds being received. In view of the foregoing, it is right to say that non-profits are not usually free to draw a budget around their finances — but for-profit organizations can. Funds cannot just be allocated to a cause when restricted funds are involved.

In Conclusion

As a non-profit organization administrator or manager — your financial statement is critical to your sustainability and growth. This is particularly true if you are the type that frequently looks to grantors or companies to aid your cause. The statement will tell you how much accountability your organization has to follow. It is essential that you understand the different ways you will be accountable in your for-profit or non-profit organization, as stated above.

You also have an idea of some of the complexities that may revolve around preparing your non-profit financial statement in the future — and can be better guided on the differences between the financial statement of non-profit and for-profit organizations.

Featured Image Credit: Provided by the Author; Pexels; Thank you!

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What if there was no lag in anything that you clicked on your PC, laptop, phone, or your smartwatch? Such low latency that the human brain does not even notice it. That would be the flow of information and processing at the speed of light enabled by an optical computer based on photonic technology right there at your fingertips.

The system you are using right now works on electrical signals to perform calculations; optical computing uses light. It makes it faster, more efficient, and more compact. Could it be the next big thing for DeepTech VCs? 8X Ventures conducted research to consolidate the evolution of hardware computing and where it’s heading. Let’s find out through the prism of computing history.

The first electronic computer

The Electronic Numerical Integrator And Computer (ENIAC) was the first electronic computer, and it was made up of vacuum tubes, developed during World War II in the 1940s. It might sound like a real estate hazard if I told you how big it was. It was approximately the size of a room, measuring 8 ft high, 3 ft deep, and 100 ft long. Don’t listen to people complaining about the ergonomics of a smartwatch on their wrist. What we have achieved in those 80 years is no less than magic.

Though it was our first electronic computer and had calculations to construct a hydrogen bomb as its first task, it still was highly inefficient, slow, and took a lot of space, right? Therefore, in the coming decades, we needed technology that can overcome those limitations. And that’s when electronic computers based on transistor technology came into being. Let’s talk about them. Before we do that, if you are a history or tech buff or both, you can find a portion of that giant machine on exhibit at the Smithsonian Institution in Washington, D.C.

The age of binary computation

Transistors, typically made of Silicon, enable the logic of present computing systems. Millions of microscopic transistors on a chip manipulate the electrical current and thus enable the binary system of 0 and 1, the language our computers understand. ENIAC was definitely an odd bird and relied on a 10-digit decimal system. It was the invention of transistors that changed the game.

When compared to ENIAC, transistors are very compact, fast, and efficient. They are holding the backbone of our digital economy, the data centers. But as per, a report by International Energy Agency (IEA) suggests that data centers and data transmission networks each account for 1-1.5% of global electricity use. The whole internet infrastructure? Take it to 10%.

Most data centers use almost as much non-computing (cooling and power consumption) power as they do to power their servers. Even though they are exponentially better than vacuum-tube-based processors and are continually improving, the graph of this technology is about to saturate. Moore’s law is not dead but decaying.

At some point, the transistors on a chip will reach the size of individual atoms, and it will no longer be possible to continue shrinking them and increasing their density. Scaling would be almost impossible, power consumption would increase, and they would not be as affordable. We won’t be able to fit more silicon transistors on a chip as we did for the last few decades.

What do we do then? We look for emerging technologies, such as quantum computing, neuromorphic chips, photonics, and new materials. The progress in optical computing makes it the next best contender to revolutionize hardware computing again. Let’s find out how?

Optical computing: The power of God

A typical computer is the result of three things it does really well: compute+communicate+store. In the electronic configuration, these processes are performed when current is manipulated with the help of transistors, capacitors, resistors, and other components. In photonic computing, light is manipulated using photodetectors, phase modulators, waveguides, and more. These are the building blocks of electronic computers and optical computing, respectively.

Unlike electronic computing, which works on electron manipulation, photonic computing relies on the properties of photons. This technology is based on the idea that light can be used to perform many of the same functions as an electrical current in a computer, such as performing calculations, storing and retrieving data, and communicating with other devices.

So, how is it better if it has the same functions and works on binary language?

Higher bandwidth:

The wave properties of light allow parallel computing capabilities that enable optical computing to package more information and therefore see higher bandwidth. This makes optical computers even more compact and process way more complex data.

Highly efficient:

Light is also less prone to transmission losses as compared to electrical current and thus does not generate the same level of heat as electrical computing. That means it makes optical computing highly energy efficient. Also, one does not need to worry about electrical short circuits since they are immune to electromagnetic interference.

Faster processing

Even under perfect conditions, the speed of the electric current is 50-95% of the speed of light. And that makes optical computers faster than the prevalent ones.

How far are we?

The image you see at the top of this article depicts the final destination of an optical computer: a crystal slab with no screen but holographic projection in the air for input and output. It will take decades to get there, and that’s a moonshot as of now.

But already realizable applications are seen in near-edge computing and data centers. That means, with near-edge computing capabilities, a 5G-enabled IoT device at a retail store could compute and store a portion of its generated data then and there instead of transferring all the raw data to a faraway data center. Result: low latency, low transmission losses.

Lightspeed Photonics, a deeptech startup in Singapore, is building next-generation optical interconnects that send data into the chips directly through lasers (no cables!) and integrate computing chips for high bandwidth data processing at low power. This is a more realizable example of optical computing as compared to optical computing’s full potential.

Conclusion

Optical computing isn’t completely replacing electronic computing for the next few decades, but its integration is heavily augmenting it, thus removing roadblocks that we face today. The progress on this integration positions DeepTech investors to bet their money on startups working on transforming the computing industry early on.

Featured Image Credit: Created with DALL·E 2 – OpenAI; Provided by the Author; Thank you!

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As the world of blockchain and cryptocurrency continues to grow and evolve, it is important for entrepreneurs and developers to stay on top of the latest trends and opportunities in the industry. EthDenver 2023 is bringing together some of the brightest minds and most innovative companies in the space.

If you are planning to attend EthDenver and are interested in meeting with top VC funds, join us at OnePiece Labs’ afterparty on March 1st!

Besides us, here are some that should definitely be on your list: 

1. Andreessen Horowitz (a16z) Crypto
   a16z is a top-tier venture capital firm that has invested in some of the most successful startups in the world. Their crypto division, a16z Crypto, was founded in 2020 and has raised $7.6 billion in total with a recent addition of $4.5 billion to its fourth fund.
2. 1kx Network
   Founded in 2017, 1kx Network is a token angel fund with the thesis of extrapolating Bitcoin’s success to embed cryptoeconomic incentives into everything; transactions, computation, storage, prediction, power. Their portfolio includes some of the most innovative and promising projects in the blockchain space, such as The Sandbox, and Matter Labs.
3. Pantera Capital
   Pantera Capital is one of the oldest and most well-respected blockchain-focused VC funds in the industry. They have invested in over 100 blockchain projects, including some of the most successful ones like Coinbase, BitGo, and Polkadot.
4. CoinFund
   CoinFund is a blockchain-focused VC fund that invests in decentralized protocols, blockchain-based applications, and cryptocurrency infrastructure. They have a broad portfolio that includes projects like Blockdaemon, Dapper, and Polkadot. They launched a $300M Web3 fund in Aug, 2022. Sectors of interest for the early-stage fund include layer 1 blockchains, gaming and NFTs. With check sizes ranging from $6 to $10M, the fund will likely back 30 to 40 companies.
5. Dao5
   Dao5 is a $125 million fund led by Tekin Salimi, who is a former General Partner from Polychain Capital. Salimi’s vision for Dao5 is to become a fully founder-owned DAO by 2025. Dao5’s advisory board include Emin Gün Sirer — founder of the Avalanche protocol, Do Kwon — founder of the Luna protocol, Ben Fisch — professor of computer science at Yale University, Ivan Soto-Wright – Founder of Moonpay.
6. Galaxy Ventures
   Galaxy ventures is a diversified financial services and investment management company focused on digital assets and blockchain technology. Their portfolio include protocol, scaling solutions, DeFi, and Web3 infrastructure with notable investments like Fireblocks and Polygon. Apart from its venture division, Galaxy also provides trading, mining, asset management, and advisory services. Galaxy partners with Bloomberg to calculate weighted crypto indexes.
7. Matrixport Ventures
   Matrixport Ventures is a financial services platform that provides a range of services for individuals and institutions in the blockchain space. They have a venture arm that invests in early-stage projects that are building the next generation of decentralized financial services.
8. NGC Ventures
   Led by founding partner Roger Lim, NGC Ventures has their portfolio spanned from top L1 chains such as Algorand, Avalanche, Solana, and Polkadot to Defi, infra, and metaverse companies with a global presence. They closed their third blockchain fund at $100 million last year to extend its focus into GameFi and NFTs.
9. Outlier Ventures
   Outlier Ventures is a venture capital firm that invests in startups that are building the future of the decentralized web. They have a strong focus on Web 3.0, DeFi, and NFTs with a portfolio of over 100 Web3 companies. They have recently partnered with Aptos Foundation to launch the Move Accelerator in May 2023.
10. Variant fund
    Variant fund backs mission-aligned founders at the earliest possible stage. They have a focus on interoperability, privacy, and scalability, and have invested in projects like Uniswap and Aptos. Jesse Walden, Co-Founder and General Partner at Variant, was an investment partner on the first crypto fund at Andreessen Horowitz and later led a16z Crypto Startup School.
11. Two Sigma Ventures
    With a portfolio across all industries, Two Sigma Ventures has invested in several promising Web3 projects with successful exits. Its data-driven approach, deep industry expertise, collaborative approach, and long-term investment horizon make it a strong choice for entrepreneurs and investors looking to engage with the rapidly evolving Web3 industry.

This list is not the most exhaustive one, but would be a great starting point to get to know some key players at ETHDenver.  

The post Top VCs to meet at ETHDenver 2023 appeared first on ReadWrite.

Despite most people’s efforts to avoid debt and not exceed their budget, it can be easy to overspend. Many common money wasters, however, lurk in the shadows, waiting to steal your money. So, let’s bring these money wasters into the light so that you banish them for good.

Don’t be discouraged if you check every box on this list. After all, the average American wastes approximately $18,000 per year. In any case, it’s an opportunity to take stock of your expenses and identify where you may be wasting money.

1. Bank Fees

In the long run, even small fees, such as those for withdrawals from out-of-network ATMs or service charges for keeping a checking account, can add up. In fact, according to a Bankrate survey, non-interest checking accounts, excluding free checking accounts, had an average monthly fee of just over $5. What’s more, interest-bearing checking accounts had a fee of more than $16 for those who did not qualify for a waiver.

So, the answer here is pretty straightforward. Change banks.

It seems unlikely, but Bankrate reports that nearly half of checking accounts don’t charge monthly fees. And, unless you can avoid monthly fees with your current bank, you are likely paying more in fees than interest.

2. Late Fees

Late charges on credit cards typically range from $15 to $35. Ouch. Fees are also typically assessed for late payments on mortgages, utilities, and rent. Even returning Redbox movies a day late or not returning library books on time will result in pricey fees.

In addition to costing you money, being late with your payments can hurt your credit too. Most lenders, however, do not report a late payment until it has been 30 days. Furthermore, credit cards often impose penalty APRs for late payments, which can dramatically increase your interest rate.

Setting up autopay will help you pay the minimum balance by the due date if you have trouble getting payments out on time. Also, apps such as Mint can remind you when bills are due. Or, you can use your trusty calendar to notify you of upcoming payments.

One more thing. A late payment may also be waived or removed from your credit report if you accidentally paid it late. If you have made one careless error and have a good track record of being on time, most companies won’t penalize you.

3. Insurance You Don’t Need

“This is one that often goes overlooked because many often think the more insurance, the better,” says Leslie Tayne, a debt-relief attorney at Tayne Law Group. “But certain forms of insurance are just not necessary for most people and can lead you to spend unnecessarily.”

Tayne argues these insurance products are wasteful:

• Identity theft insurance is available if your credit card comes with fraud protection. This is true for most credit cards, such as the Citi® Double Cash Card.
• Children’s life insurance, since children rarely have assets to protect. A child life insurance policy often comes with a savings component called “cash value” that can be used for college or for a down payment on a new house. Still, the fees outweigh the rates of return, so as a parent, it is better to invest your money somewhere else. It’s more important to start a 529 savings plan or to create a fund to cover your child’s costs in case of an emergency.
• Rental car insurance is available if your traditional car insurance extends to rental cars.
• Collision insurance for older, low-value cars. Collision coverage might not be necessary, depending on your deductible and damage.
• Travel insurance is provided by your credit card if you book your travel on that card. You should contact your card issuer to see if your card covers trip cancellations and lost luggage, such as the Chase Sapphire Preferred® Card and Chase Sapphire Reserve®.

4. Ghost Subscriptions

There is no doubt that subscriptions are easy to obtain online. But they are equally easy to forget to cancel. In fact, Chase found in an April 2021 survey that nearly two-thirds of consumers forgot at least one recurring payment.​

In addition to avoiding late fees, automatic payments can be convenient, such as those for utility bills. However, others can cost you a lot of money in the long run.

For example, a subscription to investment-information service Morningstar runs $34.95 monthly and $249 annually. Keeping that subscription should be a no-brainer if you are an inactive user.

However, for any unused subscription, you should cancel it ASAP. After all, you don’t want to get hit with a costly auto-renew.

To make this less of a hassle, sign up for a service like Truebill or Trim. These tools monitor your bank or credit card statement to see which subscriptions can be cut.

5. Credit Card Interest

According to the Consumer Financial Protection Bureau, Americans pay an average of $1,000 per year in high-interest debt and credit card fees. The use of credit cards can be beneficial, like improving your credit score and earning discounts and cashback. In spite of this, carrying a balance can put a strain on your finances.

In other words, if you are in debt, focus on paying down your existing balance and put your cards on hold. If you do make a purchase, make sure that you’re able to pay off the balance. For example, only buy a pair of concert tickets for $150 if you can pay that off in full.

6. Energy Vampires

A device that consumes energy even after it has been turned off is called an energy vampire, explains Duke Energy. Your home is full of them, including phone chargers, cable boxes, and coffee makers. It’s estimated that 20% of your monthly electricity bill is accounted for by these phantom energy suckers.

Typical energy vampires include “bricks” and “wall warts”:

• Devices that have a large plug, such as cellphone chargers, are called wall warts. Even when not in use, it consumes energy.
• The brick is a small black box found on laptop computers, televisions, and some cable TV equipment cords. These bricks continuously consume energy if left plugged in.

How can you control energy vampires? Well, for starters, you can unplug devices that you don’t use often. Plugging wall warts and bricks into power strips and turning them off when not in use is another suggestion.

7. Not Adjusting Your Thermostat

Obviously, you want your home to be set at a comfortable temperature. However, do you really need the house to be 72 degrees when you’re away for the whole day?

The U.S. Department of Energy says you can save up to 10 percent a year by simply adjusting your thermostat 7 to 10 degrees from its normal setting for eight hours a day. The house can be heated (or cooled) to the temperature you prefer before you get home with a programmable thermostat. To avoid ghost readings – unnecessarily high or low temperatures – locate the thermostat properly. Ideally, the thermostat should be installed on an interior wall away from direct sunlight, drafts, and windows. ​

8. Plumbing Issues

Leaking faucets and toilets can keep you awake at night as well as cost you money. Take the example of a bathroom faucet that drips at the rate of 10 drops every minute. The U.S. Geological Survey’s drip calculator calculates that three leaking faucets would drip 43,200 gallons of water per day at that rate. Despite the fact that water is relatively cheap, that’s still a lot of water. In most cases, 1,042 gallons would cost approximately $1.50.

​Running toilets, however, can be a real water guzzler.

In the average household, leaky toilets waste about 200 gallons of water per day, or approximately 6,000 gallons per month, or $108 a year. Repairing a leaky toilet costs, on average, $18.55 per toilet, with a range of $17.36 to $19.75. On the flip side, labor and materials result in a total of $223.63 per toilet, ranging from $202.77 to $244.49.

9. Food Waste

According to the Natural Resources Defense Council, 40% of food produced in the United States is never consumed. Sometimes, that happens. We all have bad apples that need to be tossed. However, you can reduce food waste by doing the following courtesy of the Food and Agriculture Organization of the United Nations:

• Buy only what you need. Prepare your meals in advance. And, ensure you stick to your grocery list and avoid impulse purchases.
• Pick ugly fruit and vegetables. Often, fruits and vegetables with odd shapes or bruises are thrown away since they don’t meet arbitrary aesthetic standards. However, they still taste the same.
• Store food wisely. Your cupboard or fridge should be organized so that older products are at the front and new ones at the back. Make sure open food is stored in airtight containers in the fridge and that packets are closed to prevent insects from getting into them.
• Love your leftovers. You can freeze leftovers or use them in another meal if you don’t eat everything you make.
• Start small. Share large dishes at restaurants or take smaller portions at home.

10. Unclaimed 401(k) Matches

You can add significant value to your nest egg by contributing to a 401(k) or similar employer-sponsored retirement plan, notes FINRA. For example, if you earn $40,000 and contribute $1200 to your 401(k), you are 30 years old, earn $40,000, and contribute 3 percent of your salary to your 401(k). If you make the same salary and contribute the same amount each year until 65, let’s assume you make the same contribution. In 35 years, your 401(k) will have earned you $42,000.

Consider what would happen if your employer offered you a match. Typically, the match is dollar-for-dollar up to 3 percent of the employee’s salary. Even if your investment value does not increase, you will have set aside $84,000 by the time you retire, which is a doubled savings amount. Take a look at it this way: you can contribute 100 percent more at no cost.

Sadly, a 2015 study found that one in four employees don’t invest enough in 401(k)s to earn a full employer match. Employees who failed to earn the match ended up wasting $1,336 of their own money.

Missing out on this money will leave you with no financial security in the future. Talk to your company’s human resources or accounting to find out what the employer match is, and then increase your automated investments in your 401(k) to get at least the full match.

11. Mutual Fund Fees

An expense ratio, or percentage, represents your overall investment in a mutual fund, explains NextAdvisor. For actively managed funds, they typically range from .5% to 1.5%, and for passively managed funds, they typically range from .2% to .4%. Generally speaking, any fee greater than 1% should be avoided.

A mutual fund with a 1% expense ratio, for instance, will cost you $10 for $1,000 invested. Despite its small size, it adds up over time.

In general, experts recommend fees under .2%, and anything over 1% can eat into your long-term investment earnings. Fees that are over 1.5%, and certainly over 2%, are not worth the hassle. The low fees of passively managed funds are one of the reasons experts recommend them, as many have fees under .2%.

12. Not Using Available Discount Code or Coupon

“One of the biggest ways people waste money is by paying full price instead of looking for discounts or ways to lower the price of an item before purchasing,” said Rebecca Gramuglia, consumer expert at TopCashback. “By skipping this step, you may be spending more money than needed, and that extra money could have gone towards another purchase or your savings fund.”

13. Extended Warranties

Almost everything from televisions to appliances to vehicles comes with an extended warranty. Despite the fact that you may think you are being financially responsible by purchasing an extended warranty, the truth is that extended warranties are usually not worth the money.

In general, extended warranties exclude the most common problems in their fine print. In addition to extended warranties, manufacturers also provide free coverage as part of their warranty plans. As a result, the FTC warns that many extended warranties aren’t worthwhile.

A better option? If your possessions break, you would be better off saving for the cost of repairs or replacements instead of buying an extended warranty.

14. Gas Hogs

Be honest. Does your vehicle really need premium gas? It’s unlikely unless your car’s maker tells you otherwise. Most major gasoline brands have additives to keep your engine sparkling, so the occasional tank of premium won’t do the trick. Typically, turbochargers and high-compression engines are common reasons why certain cars need premium gas.​

​Other ways to save fuel and money: ​

• Make sure your tires are properly inflated. Make sure your tires are properly inflated to improve your gas mileage by up to 3 percent.
• ​Take it easy on the gas and brakes. According to the Department of Energy, gas mileage rapidly declines when you drive over 50 mph, costing you approximately $0.23 extra per gallon.
• ​Get your engine tuned. It has been reported that fixing a serious problem, such as a broken oxygen sensor, can increase your mileage by as much as 40 percent, according to the U.S. Department of Energy. ​

15. Unclaimed Tax Deductions

According to IRS data, about 20% of taxpayers qualify for earned income tax credits but fail to claim them.

Not only this, but other tax credits go unclaimed as well. In addition to choosing the wrong filing status, taxpayers make all kinds of tax mistakes, such as itemizing their deductions or claiming the standard deduction.

You can use online tax programs to help you catch deductions and credits that you should be eligible for. In complex tax situations, such as when itemizing for the first time or starting a business, hiring a tax professional may help you maximize your tax savings.

Frequently Asked Questions

Do I need this?

To live on a budget, save money, and achieve your goals, you must distinguish between a want and a need.

A “need” is a necessity. In budgeting, necessities include rent, mortgage, utilities, food, and transportation.

The term ‘Want’ more accurately describes something that you would like to splurge on. More specifically, it’s something you save up for and anticipate buying.

Is there a way I can save money by buying this somewhere else?

Be persistent in your search for a better price. Take out your smartphone, tablet, or laptop and compare prices.

Be sure to take into account rebate/cashback programs and store loyalty rewards. I personally get money back through cashback programs every time I shop. In addition, I still earn rewards from the store and use them for savings in the future. Using your resources together will save you the most money.

For seasonal products, be sure to research. You can save hundreds of dollars by searching “Best time to buy” on Google.

Do I have the money to cover this?

Despite common sense, some people are unaware of their account balance. After all, you cannot buy it if you lack the money. And, if you don’t have the funds to cover the purchase, you probably don’t have enough to pay off your credit card balance if you charge it.

In short, don’t make purchases unless it’s in your budget. If you don’t save the money until you do.

Is there anything else I could do with this money?

What monthly bills do you have to pay, such as utilities, rent, mortgage, and insurance? Be sure to include the latest bills in your budget as well. Your bank statement may just contain something you forgot you committed to every month.

Are you fully funded for an emergency? Are you debt-free?

Published First on Due. Read Here.

Featured Image Credit: Photo by energepic.com; Pexels; Thank you!

The post 15 of the Most Common Money Wasters appeared first on ReadWrite.

In the words of Maya Angelou, “Hate, it has caused a lot of problems in this world, but has not solved one yet.”

While it’s normal to occasionally have hateful feelings, holding on to this feeling for too long can be unhealthy to the mind and body. Because of this, there aren’t too many things that I would say that I detest.

However, there are couple of things that really gets my blood boiling. For example, people throwing trash out their car window. When it was sheperd’s pie day at school — which is odd since it’s pretty much ground meat and mashed potatoes. And, whenever the Gin Blossoms, the 90’s band behind tracks like “Hey Jealously, comes on the radio.

But, above all, I HATE frivolous spending. It’s not that I’m a cheap. It’s just that wasting my hard earned money prevents me from accomplishing important goals, like building an emergency fund, going on vacation, or establishing a nest egg.

Thankfully, you can use the following strategies to spend less, save more, and release those toxic hateful feelings.

1. Find your beliefs.

“It starts with asking yourself a series of questions that go deeper and deeper to discover the true meaning of why you are overspending your money,” says Alex Craig of HaveaRichMarriage.com.

“The technique that works is the Five-Fold Why, which is asking yourself, ‘Why?’ until you have discovered the deeper meaning,” he adds.

If you would like to put the technique into action, pick an area of spending that you feel guilty about or would like to cut back on, he suggests. If you’re stuck, this is often an area where you overspend.

If you aren’t sure whether you overspend in an area, Alex recommends that you do some research to find out if you’re overspending. “Otherwise, you may want to consider if you need to spend $600 per month on restaurants,” he says.

Once you have located the area, ask yourself, “Why?” several times until you uncover the reason why you are spending.

To illustrate, Alex discovered that he was overspending on clothes in the following ways;

• “Why am I spending so much on clothes when I have plenty in my closet?”
• “Because I want to look good.”
• “Why do I want to look good?”
• “Because I like when people tell me I look nice.”

For Alex, this helped him make progress. “I can see that it is no longer about spending money on clothes, but spending money because I want people to compliment me.”

By learning the real reason for spending, we can start taking action against it.

2. Record your expenses.

If you want to save money and spend responsibly, you must understand your cash flow. That’s non-negotiable.

But, what exactly does this entail? At the very least, you should keep track of your monthly net income, your monthly expenses, and your savings at the end of the month. From there, you will calculate your expenses, subtract them from your income, and see what is left.

It’s crucial to keep track of every expense, no matter how small. For example, the other night I was craving some tacos, so I stopped by my local taco shop. Even though I only spent $10, if I didn’t keep track of that, it could throw off my budget.

In short, make a habit of recording every penny spent to calculate your weekly expenses. Then, you can observe what you can improve.

I know that this is a lot of work upfront. The good news? There are more than expense tracker apps and tools to make this a little less taxing. Some examples include Mint, You Need a Budget, Goodbudget, Expensify, and Unsplurge.

3. Enact a spending freeze.

“Pick a length of time: a week, a month, six months—where you don’t buy any products or services you don’t absolutely need. This spending freeze helps you save money faster,” advises Rachel Ellen over at You Need a Budget. “Then give this spending sacrifice a ‘why’ (maybe you want to have enough money for Christmas flights home or to build an emergency fund).”

Now that you know why you spend, you may be able to pause on those impulsive purchases. Moreover, there’s a finish line in sight — don’t forget to mark it on your calendar. Deferring all those one-time purchases in order to achieve your financial goal will make it seem more feasible, she adds.

Another priceless tip from Rachel? Add these no-spend days to your calendar.

“You can do this a number of ways: maybe you pick every Tuesday to be a zero spend day,” she suggests. “Or maybe you make it a game with your partner and the first one to log five zero-spend days in a month gets $20 in extra fun money (because guaranteed you’re going to save more than $20 if you do five zero-spend days every month).”

Ultimately, your checking account will appreciate it.

4. Create physical barriers between you and your spending.

Have you ever tried to run errands only to be sidetracked by a road block? Maybe a tree had falled down following a storm or there’s scheduled road work? Those types of road blocks are a literal barrier between you and your plans.

While, the same idea applies to saving and spending.

For example, whenever you leave the house, only bring cash with you so that won’t overspend. You could place your credit cards in your freezer, put an actual freeze on your account, or remove your stored info from online stores.

You can also automate your savings so that you deduct a portion of your paycheck to a savings account before you have the chance to spend it. Another trick. Purchase a CD for important and large expenses like taxes. For instance, if your property taxes are due in 6-months, invest in a 6-month CD so that you won’t touch this money — you’ll also earn interest as well.

5. Adopt the “What I Need Lifestyle.”

It can be tricky to tell the difference between wants and needs. A general rule of thumb is that if there’s something that’s essential to your survival, then it’s a need. However, if you wish to acquire something for your enjoyment or enjoyment of it, that is a want.

It is, therefore, crucial to adopt a what I need lifestyle in order to achieve the ‘save more, spend less’ goal.

To differentiate between the two, grab a piece of paper and list wants and needs in two columns. You can then place items you want to purchase in the two columns whenever you feel like it. With practice, you’ll find out whether or not you should spend your hard-earned money on specific items.

6. Put visual reminders of your financial goals.

Considering a big purchase, like a vacation, car down payment, or paying off your credit card debt? “Place a visual reminder in places you look at a lot,” suggests Patty Lamberti over at Money Under 30.

Make your mobile phone’s background photo resemble a picture of the next ideal vacation destination you plan on visiting is one her recommendations. Or, wrap your debit card in a picture of the next ideal vacation destination you would like to visit.

Are you an excessive online shopper? If you want to wipe out all of your credit card debt, change your computer screen background to a big fat zero, she adds.

“This helps take the emotional excitement out of buying and makes it a deliberative, cognitive process,” Ryan T. Howell, Ph.D, an Associate Professor in the Psychology Department at San Francisco State University and co-founder of Beyond the Purchase, told Patty.

7. Have a solid keystone habit.

“There are certain habits that make things way easier, these habits are more important than others, these habits are called keystone habits,” explains financial planner Owen Winkelmolen. “Keystone habits create a foundation from which you can make even bigger and more positive changes. Mastering the right keystone habit can transform your life.”

In addition to building a solid foundation, keystone habits will enable you to make even more positive changes in your life, he adds. Moreover, once keystone habits are established, they are much easier to maintain.

According to Owen, these are the 4-most important keystone habits in personal finance;

1. Budgeting. As you assess your needs/wants and plan your spending, budgeting is an important keystone habit. Once you’ve mastered budgeting, you’ll suddenly be able to make more balanced, values-driven decisions.
2. Tracking your spending. The habit of tracking your spending provides clarity and peace of mind. Good habits are reinforced, while bad spending habits are revealed.
3. Paying yourself first. You should save 10 to 20% of your net income at the very least (paying off debt counts as saving as long as you’re not adding more each month). If you save 10-20% of your income, you will be able to meet your other financial goals. If you don’t save regularly, it’s difficult to become financially stable, says Owen.
4. Investing. A well-designed investment plan and regular review of it will help you maximize your investments. It can can help you stay the course during a bear market and prevent you from getting sucked into the irrational exuberance of a bull market, Owen concludes.

8. Don’t be a follower.

Over the holidays several of my friends got smart watches. I know that they’ve been around for years. But, I’m not gonna lie. I got a little peanut butter and jelly about all the awesome features.

Suffice to say, I was tempted to get myself a shiny, new smartwatch. But, after some internal deliberation, I decided it’s just not worth it. Of course, this could change if I fall into a surplus of money. But, right now, it’s not a necessity.

While it’s no easy feat, stop following trends, unsubscribe from temping email newsletter, and don’t try to keep up with the Joneses. Just focus on what your financial priorities are and neglect the rest.

But, what if you can’t resist the temptation? Be patient.

While the exact time frame varies, this could be anywhere from 24-hours to 30-days, give yourself some time between your impulse purchase and the moment you make the purchase. You may realize that it’s not worth spending the money after letting it marinate for a bit.

In the meantime, if you need a dopamine-boost, brainstorm alternatives. For example, the other day it was a stunning 65-day degree day outside. So, I took a break from work and took my dog for a leisurely walk. Not only was this rewarding and put me in a better mood, it distracted me from making any spontaneous purchases.

9. The 3 R’s.

Do you remember the three Rs? If not, they are reduce, reuse, and recycle. There are a few basic rules that we can follow to limit the amount of waste we produce. But, we can also apply them to saving and spending.

1. Reduce. One idea is to purchase more durable items as opposed to junk that we constantly have to replace. Not only is this easy on your wallet, it’s good for the environment as well.
2. Reuse. Instead of throwing away old or damaged items, try to repurpose them. For example, if you have old jars, you can use them to store change, screws, or for pickling food items like jalepano peppers.
3. Recycle. There’s more to recycling than placing cardboard and plastic in a blune bin. You can take scrap metal or cans to a scrapyard and make a couple of bucks. Do you have old ink cartridges or car batteries? You might be able to return these items to stores in exchange for credit or gift cards.

10. Pay down your debt.

In order to save more, you first have to eliminate your debt as much as possible. In the case of a debt consolidation,transferring your credit card with a 17% interest rate to one with an introductory 0% APR can be quite beneficial. And, talk to your lenders to find the best deal for you.

By keeping the debt value at zero, you can balance your credit score. Also, paying your bills on time will qualify you for loans and other benefits if you are a good customer. Alternatively, you can repay your debt and start afresh by taking out a personal loan with a low interest rate.

Frequently Asked Questions About Spending Less and Saving More

1. When should I start saving money?

The short answer? ASAP.

No matter how much you put away, it’s a good idea to set money aside now instead of putting it off. To get started with saving, build an emergency fund. When an emergency happens, you’ll have the money to cover the expense without putting it on your credit card.

2. How much money should I have saved?

Ideally, as much as you can spare.

As a starting point, and if you can, save at least 10% of your income. As a rule of thumb, this translates into saving at least three months’ worth of expenses in an emergency fund.

Budgeting and tracking your spending are the best strategies for saving money. You shouldn’t stress over your first month’s budget when you’re just starting out. Even though your past purchases may seem overwhelming, looking at them will help you identify areas for saving.

3. Where should I save my money?

Well, that depends. But, you typically want to consider the following factors;

• Interest rate. The interest rate or investment return of certain accounts may be higher than those of others. They may also differ depending on the broker or bank. I personally use Chime as they offer a higher interest rate than most.
• Withdrawal access. In some accounts – such as CDs and retirement accounts – the owner of the account pays a penalty fee if the money is withdrawn before a certain date. If you think you’ll need your liquid cash within the next few months, you’ll want to make sure your choice of account caters to that need.
• What is the length of your goal? Calculate how much you will need to save to reach your financial goals. Investing, rather then saving, may be the better option if it will take several years.

4. Is there such a thing as good debt?

Absolutely.

Basically, debt is a sum of money that is owed. A good money management strategy balances saving and borrowing. Having said that, you shouldn’t avoid borrowing at all costs.

If you owe money, but can comfortably make payments and do not borrow more than you can afford, that is good debt. Borrowing beyond your means can lead to bad debt, where you cannot make payments on time or fall behind. In turn, this can affect your credit score.

5. What does investing mean?

The act of investing involves putting money into a venture, such as a company, a commodity, or even real estate, so that it can grow. With a retirement account, investing is the easiest way to get started, but there are many investment options. And, despite the myth, it’s not as expensive as people think to start investing.

This article was originally published here.

The post I HATE Spending Money: How to Spend Less and Save More appeared first on ReadWrite.

As we all know, 401(k) plans are a great way to save for retirement. However, if you have a lot of debt, cashing out your 401(k) is an option; but is it a good option? In this article, we will discuss all the pros and cons of using your 401(k) savings to pay off debt. We will also explore some alternative methods for paying off debt so that you don’t have to rebuild your retirement fund from scratch.

What Is a 401(k)?

A 401(k) plan is a retirement savings plan. The money you contribute to your 401(k) plan is not taxed until you withdraw it; in other words, your savings will be tax-deferred as they grow.

There are two types of 401(k) plans: Traditional and Roth. With a traditional 401(k), you will not pay taxes on the money that you contribute until you withdraw it. On the other hand, with a Roth 401(k), you pay taxes on the money you contribute, but you don’t have to pay taxes when you withdraw it in bulk. Another difference between a traditional and Roth 401(k) is that the former lets you take a loan from your account. With a Roth 401(k), you cannot touch the savings until you’re retired.

How Does a 401(k) Plan Work?

When you contribute to a regular 401(k) plan, you are making pre-tax contributions from your paycheck. That means your money won’t be taxed until you withdraw it, and if you take out a loan against yourself and pay it back in time, that won’t be taxed either. Upon retiring, you will be required to pay taxes on the money you have withdrawn from your account. We’ll discuss all your options for pre-retirement 401(k) funding below, but we’ll go over the 401(k) basics first.

The amount of taxes you pay will depend on your tax bracket at the time of withdrawal. This is important to note as it means that you could end up paying more in taxes on the money you withdraw from your 401(k) at retirement than you would have if you had just taken the money out of your paycheck and paid taxes on it upfront. You should also ensure that you do not withdraw more money than you anticipate needing after retiring.

Finally, once you begin “vesting” your 401(k) money, you might be barred from withdrawing for a while. If you’re looking into 401(k) loans, your first stop would be to make sure this is not the current state of your affairs.

Getting a 401(k) Plan

Some employers offer 401(k) plans to their employees to attract and retain talent, but not all of them. If your employer does not provide a 401(k), you can still open an account at several different investment firms with the same purpose. Once you do that, you can start contributing to your retirement savings.

When Can You Start Using Your 401(k)?

You can start using your 401(K) as soon as you have vested in the account. The vesting schedule varies from plan to plan, but it is typically between one and five years. To determine how long you need to be employed before becoming vested, you can check your employee handbook or contact your employer. If you don’t yet have access to your 401(k) funds, you can look at alternatives, such as taking out a personal loan or using a credit card.

What Is a 401(k) Loan?

A 401(k) loan gets taken out against your 401(k) savings. Taking out a 401(k) loan is practically borrowing from yourself. This means that the interest you pay on a loan goes back into your account. However, just like with any other loan, you’re taking a risk: If you can’t pay it back, you might be left without retirement savings.

This loan’s name comes from the section of the tax code that governs it. Under section 401(k) of the tax code, you are allowed to borrow up to $50,000 or 50% of your vested account balance (whichever is less) from your 401(k).

Another important thing about 401(k) loans is that they are not tax-deductible, meaning that you will have to pay taxes on the money you borrow. The money you decide to withdraw can be used for any purpose, but it will be treated as a withdrawal and taxed accordingly if you don’t repay it within five years.

Costs Associated with 401(k) Loans and Withdrawals

We mentioned some costs associated with taking out a loan or making a withdrawal from your 401(k) account. These include taxes and penalties.

If you take out a loan from your 401(k), you will have to pay interest on the loan. The interest rate is usually lower than the rate you would pay on a personal loan, but it is still worth considering. Additionally, if you withdraw from your 401(k), you will have to pay taxes and penalties on the amount.

The tax rate will depend on your income level and the type of withdrawal you made. For example, if you take out a hardship withdrawal, you may have to pay an additional penalty if the amount exceeds $10,000, and you won’t be able to pay it back, only contribute to your 401(k) later. Also, if you are under the age of 59 ½, you will likely have to pay a 10% penalty on the amount you withdrew.

Using 401(k) to Pay Off Debt

Now, here’s the part we have all been waiting for: We’ve discussed what 401(k) is and how it works, so let’s now see if it’s a good idea to cash it out 401(k) to pay off debt. There are two ways of using 401(k) to pay off debt: Taking out a loan or making a withdrawal.

401(k) Loans

As mentioned before, this option lets you borrow from yourself, and the interest you pay on the loan goes back into your own account. This can be a good option if you need a large sum of money and don’t want to pay taxes or penalties on the withdrawal. However, there are some drawbacks to this option.

For one, if you leave your job for any reason (including being fired), you will likely have to repay the loan in full within 60 days, or it will be considered a withdrawal, and you will be subject to taxes and penalties. Second, if you can’t repay the loan within your repayment period for any reason, it will be treated as a withdrawal, and you will owe taxes and penalties on the amount you borrowed.

401(k) Withdrawals

The second method is to withdraw from your 401(k) account. This is less desirable than taking out a loan because you will have to pay taxes and penalties on the amount you withdraw.

However, if you are in a situation where you can’t take out a loan or don’t want to repay it, this may be your only option. You will have to pay taxes on the amount you withdrew in the same year you made the withdrawal.

Should You Use Your 401(k) To Pay Off Debt?

Here are some of the key benefits of using 401(k) to pay off debt:

Repayment Flexibility

One of the most significant benefits of using your 401(k) savings to pay off debt is repayment flexibility. You can choose how to repay it: You can either make monthly payments or repay the entire amount at once. Additionally, if you take out a loan from your 401(k), you have up to five years to repay it.

Lower Interest Rates

Another benefit of using your 401(k) to pay off debt is the lower interest rate than you would get on a personal loan. Additionally, if you make a withdrawal from your 401(k), you will only have to pay taxes on the amount you withdraw, which may be lower than the interest rate on your debt.

Tax Benefits

Another advantage of using 401(k) to pay off debt is tax benefits. You can reduce the amount of taxable income you have and save money on taxes. For example, if you have a 401(k) loan, you can deduct the interest you pay on the loan from your taxes. Additionally, if you make a withdrawal from your 401(k), you may be able to avoid paying taxes on the withdrawal if you repay the withdrawal in time.

Convenience and Speed

Using your 401(k) to pay off debt is a fast and convenient way to get the money you need. This is because you can usually get the money within a few days of applying for the loan or withdrawal. There are no lengthy applications or approval processes.

Why Is It a Bad Idea To Use 401(k) To Pay Off Debt?

While there are considerable benefits to using 401(k) to pay off debt, there are also some downsides to keep in mind:

Balloon Payment Risk

One of the significant downsides of using your retirement savings to pay off debt is that you may not have enough money in your account to cover it. You could end up taking out a loan or making a withdrawal from your 401(k) and be unable to repay it, and ending up with a balloon payment that puts you in a worse position than your original debt.

Losing Your Job

Another thing you should consider before using your 401(k) savings to pay off debt is the possibility of losing your job. If you take out this loan and lose your job, your repayment window shortens. Before the 2017 Tax Cuts and Jobs Act passed, that window was a strict 60 days, but now it can be extended. Still, if you can’t repay the loan within that time, it will be considered a withdrawal, and you will have to pay taxes on the amount you withdrew.

No Financial Cushion

The most apparent downside of using your 401(k) to pay off debt is that you may lose your financial cushion. Your 401(k) account balance fluctuates with the stock market, since you’re investing your money to grow over time. If there are significant stock market downturns, your 401(k) investments will likely follow suit. This could leave you without the money you need to cover unexpected expenses or emergencies. Therefore, it’s essential to consider whether you can afford to lose your 401(k) account balance before using it to pay off debt.

Slow Repayment

Another downside of using 401(k) to pay off debt is that it’s unlikely you will be able to repay the loan quickly. The average 401(k) loan term is five years, and if you can’t repay the loan within this time, you may have to face a penalty for defaulting on the loan. This can be a costly mistake that can set you back financially, which is why it’s important to only take out a 401(k) loan if you are certain you can repay it within the given frame, and preferably sooner.

Alternatives to Using 401(K) Money To Pay Off Debt

Now that you know the possible pros and cons of using your 401(k) to pay off debt, let’s also look at some of the alternatives.

Personal Loan

A personal loan can be a decent alternative to using 401(k) money before retirement. Personal loans have higher interest than 401(k) loans, but lower than credit cards. You will also have a set repayment schedule, which can help you get out of debt faster.

You can get these loans from a few different places: eBanks, credit unions, or online lending services are all at your disposal. If you go for the first option, you will need to provide your credit score and income information. If you go for the second, you don’t have to provide your credit score, but you may be required to provide other personal information, such as your address and Social Security number. Finally, online lending services usually have the fewest prerequisites, but are ripe grounds for predatory loans, so you have to be extra careful when choosing between them.

Credit Card

If you have a high limit on your credit card, you can use it to pay off your debt. This will allow you to avoid the fees and penalties associated with 401(k) loans.

However, using a credit card to pay off debt can be risky.

For one, credit cards generally have the highest interest rates of all the borrowing varieties. Not only that, but if you’re unable to make payments on time, you will end up being charged late fees. This can add up quickly and leave you with even more debt than you started with. On the plus side, if you get a card with a promotional 0% APR period, you might be able to pay off your debts on the cheap.

Debt Consolidation Loan

If you have several different debts, you may want to consider a debt consolidation loan. This is a loan specifically aimed at paying off multiple debts simultaneously. Namely, the interest rate on a debt consolidation loan is typically lower than the interest rates on your credit cards and some personal loans.

This can save you money and help you get out of debt faster, but it is vital to ensure you can afford the monthly payments. Also, debt consolidation tends to reflect badly on your credit score, so that’s another thing to keep in mind.

Home Equity Line of Credit

If you own a home and need quick cash to pay off a debt, you may be able to get a home equity line of credit (HELOC). As the name suggests, this loan is secured by your home equity. HELOCs typically have lower interest rates than unsecured loans (e.g., personal loans). However, if you default on the loan, your home could be foreclosed. In other words, this should be your last resort for paying off debt.

Payday Loans

Similar to HELOCs, payday loans aren’t the ideal way of getting out of debt. These are short-term loans that are typically due on your next payday. The interest rate on payday loans is high, and if you can’t repay the loan when it’s due, you may be charged additional fees. This can quickly turn a small loan into a large debt, which is why they’re typically only meant for smaller short-term expenses, such as car repairs or modest medical bills.

How Does Cashing Out Your 401(k) Work?

When you cash out your 401(k), not borrow it, you will have to pay taxes on the money that you withdraw, as well as a 10% penalty if you are under the age of 59 ½. The reason for the tax and penalty is that when you take the money out of your 401(k), you are not just taking out the contributions that you have made, but also the earnings on those contributions. This is different from taking a loan from your 401(k) because, with a loan, you are only borrowing the contributions, not the earnings.

When considering cashing out your 401(k), keep in mind that you are losing the opportunity to continue receiving tax-deferred earnings on the money you withdraw. Most importantly, if you cash out your 401(k), you will not have any money saved for retirement.

Minimizing the Risks To Your Retirement Fund

There are also other ways to minimize the risks to your retirement fund. For example, if you are in debt and can’t afford the monthly payments, you may want to consider a debt management plan. This is a plan where you make one monthly payment to a credit counseling agency, which then uses the money to pay off your debts. This can help you get out of debt faster and avoid late fees and interest charges.

Additionally, if you are in danger of defaulting on your student loans specifically, you may want to consider student loan consolidation. That way, you’ll combine all your student loans into one loan with a lower interest rate. This can help you save money over the life of your loan and make the monthly payments more affordable. If you can, continue making contributions to your retirement fund; however, even if you can’t afford to do that, just leaving it alone for the duration of repaying your current loans is better than cashing it out. You’ll thank yourself when you reach retirement.

Aside from these possibilities, there are a few others to think about, as well. You could take a cash advance from your credit card, borrow money from family or friends, or even sell some of your possessions. However, each of these options come with their own set of risks and should be considered carefully before moving forward. Nonetheless, they’re usually a better option than risking the savings you’ll need once you’re no longer able to work.

Bottom Line

In conclusion, there are a few things to think about before borrowing from your 401(k) or cashing it out to pay off debt. While it may be tempting to do either of those, you need to consider the taxes and penalties you will incur, as well as the loss of financial security for your future.

If you are having trouble making ends meet, it may be worth considering alternatives to minimize the risks to your retirement fund. However, if you can realistically borrow the money, pay it back in a reasonable amount of time, and aren’t too close to retiring, getting money out of your 401(k) account might be viable.

Either way, it is crucial to stay informed and base your decision both on your current situation and the long-term financial goals you are trying to reach. So, what do you think? Is cashing out your 401(k) to pay off debt a good idea or a bad idea? Let us know in the comments below.

This article was originally published here.

The post Should You Use a 401(k) to Pay Off Debt? appeared first on ReadWrite.

Over the past few years, e-commerce has grown significantly, resulting in millions of new companies offering their services online. In fact, according to the U.S. Census Bureau, the e-commerce industry generated $215 billion in sales alone in the first quarter of 2021.

New technologies and ways of making money online have been fostered by e-commerce businesses. If you’re looking for ways to earn money online, there are many options available to you. Many entrepreneurs, freelancers, and small business owners make money through e-commerce sites like Amazon and Etsy.

But, if you really want to make money online, then you need to stop doing the following ten thing immediately.

1. Not having a plan of attack.

The plan doesn’t have to be formal – but the business needs to be planned, advises Carolyn Sun in Entrepreneur.

“People regard the business plan as homework they don’t want to do but planning helps me — whatever my success is,” explains Tim Berry, chairman of Palo Alto Software, which produces business-planning software and author of The Plan-As-You-Go Business Plan.

Sujan Patel, vice president of marketing at When I Work and the founder of several SaaS startups, says, “You don’t need a formal 20-page business plan to successfully plan a business. You need to know who your customers are, what you are selling and what people are willing to pay for your product or service.”

You should also figure out how long your cash will last and how much you have.

2. Failure to launch.

When it comes to business, timing is paramount.

As soon as you discover that there is an opportunity for an online business, you will research the market, the competition, the process, and the aspects involved. On the flip side, the more you spend researching and evaluating, the more likely it is that you will miss the launch window.

In short, the longer your launch is delayed, the longer it will take for your business to begin making money.

Business experts believe this mistake occurs when business owners hesitate to launch their ideas until they are fully perfected. In reality, though “good enough” will often suffice. What’s more, if you drag your feet, there’s a very real chance that a competitor will swoop in.

Trying to be perfect can actually stall you in overthinking. Or even worse, you will end up losing your window. So, don’t fall into the analysis paralysis trap.

3. Setting money as the goal.

Prior to starting any business online, you should ask yourself what is your main goal? And, despite what you may believe, money is not a goal.

As Robert Kiyosaki once said, “Money is not the goal. Money has no value. The value comes from the dreams money helps achieve.” Having that mindset is key to running a successful business, while also living a fulfilling life.

Have trouble determining your goal? Try asking the following questions;

• What are you passionate about or what makes you happy.
• Is what you plan to do valuable?
• Does it have a positive impact on people?
• Can it truly help others?

If you answer these questions correctly, then you will be on the right track towards making money online.

4. The unwillingness to spend.

My dad used to say, “It takes money to make money.” That idiom may sound like a contradiction. But, there’s actually some truth to that statement.

Even though it doesn’t take a small fortune to start an online business, you still have to invest in it. Sadly, plenty of people launch online businesses under the mistaken idea that all they need is a computer and an internet connection.

Sure, there are a lot of ways to make money without investing much, like AdSense revenue-sharing websites. In reality, though, having money alone is not sufficient to constitute an income source.

It is essential for an online business to have a well-designed website that loads quickly. To make your website visible and appealing to online users, it is vital that you invest in a reliable web hosting service and purchase premium themes and plugins. Additionally, buying eBooks and

So, my old man was right. To make money online, you have to spend money.

5. Unclear conditions and payment terms.

One drawback to making money online is that it can be consistent and unpredictable. For example, if you’re a freelancer an ongoing gig might dry up. Or, you have a client who stiffs you. If you have an eCommerce site, you don’t know when a sale may go through.

What’s more, there could be a misunderstanding regarding payment terms. For instance, not agreeing on what payment methods you accept.

With that in mind, always have crystal clear conditions and payment terms. This could be clearly stated on your site or negotiating these terms with a client prior to starting work.

In case you’re wondering, payment terms determine how a buyer and seller close a deal. It is usually stated when payment is expected (the norm is 30 days from the invoice date), what payment methods are acceptable, any discounts that are offered, or any other provisions, such as down payments or cash advances.

6. Providing a solution to a non-existent problem and not pivoting when you find one.

Often, online businesses fail because they offer a product or service that does not solve any significant problems. Initially, it may seem like a smart idea, but after some research, you may find your solution is not perceived as a problem by your customers. As a result, you might be able to discover that there is a new way to grow the business.

Pivoting your business is a well-known business strategy. Many famous companies, including PayPal, have managed to accomplish the feat. In the beginning, PayPal shared payments across Personal Digital Assistants (PDAs), such as the PalmPilot, but it evolved into a global online payments system.

A business based on selling products or services that don’t solve a problem, but look stylish, is a warning sign — I’m looking at your Metaverse. Prepare to modify your strategy if you think it’s necessary.

7. Choosing the wrong job or niche.

There are hundreds of ways to make money online. But, I’m going to be real. Not all methods are created equal.

Case in point, mico-jobs via Amazon Mechanical Turk (MTurk). While these jobs are simple, they’re tedious and pay miserably. Often, when starting out, you’re making something like $0.002 to $2 per task.

Aside from the low pay, doing such jobs won’t teach you much that will prepare you for better-paying jobs in the future. You can only make money by working on sites like this by thinking about why someone would want to pay you a couple of cents for a few micro-jobs for them.

What if you decide to set out on your own? Consider how marketable the niche is online before selecting it. Are there already a lot of websites offering the products or services you’re planning to provide? How much online traffic is it generating?

When you see that the niche has already been saturated, it is advisable to explore other possibilities. Additionally, the niche could be untouched but the websites competing for it are having trouble getting traffic. Such a niche is more likely to fail than succeed, so you shouldn’t risk your time and money on it.

8. Having too much on your plate.

Many people make the mistake of trying to juggle multiple responsibilities at once. Making money online is a great option, but it’s the commitment that’s the key to success.

When working during the day, you shouldn’t jump between tasks trying to accomplish three at once. As a result, you’d end up working three jobs, none of which would provide you with much income. Concentrate on endeavor and master it. From there, explore ways to earn a passive income from it so that you can pursue other revenue streams.

9. Over-optimizing your site.

“Too much of a good thing is a bad thing,” says the one and only Neil Patel. This statement rings true in life and in search engine optimization (SEO). “SEO is awesome, but too much SEO can cause over-optimization.”

“Search engine over-optimization is the practice of creating too many SEO improvements to the point that the improvements begin to ruin the website’s ability to rank,” he expains. “You’re doing all the typical SEO good stuff, but then you jack it up too far.” And then all your efforts go south.

So, what are the signs that you’re over-optimizing? Well, here’s seven of them to keep a look out for;

• Keyword-rich anchors for internal links. Linking internally is good. However, anchor text containing keywords is bad.
• Non-relevant keywords. Make sure that you aren’t trying to gain traffic with unrelated keywords.
• Pointing all internal or external links to top-level navigation pages. There should be links pointing to the homepage as well as deep internal pages in a healthy link profile.
• Using multiple H1s on a page. The H1 is the main heading on the page. The problem with some webmasters is that they think great SEO is about having a lot of H1 text.
• Linking to toxic sites. “The sites that you link to are almost as important as the sites that link to you,” adds Neil.
• Keyword-stuffed footer. The best way to hurt your SEO is to over-optimize your website footer. Your only option for footer optimization is not to do it.
• Non-branded, keyword-dense URLs. It is important not to create a URL solely for its keyword value.

10. Puttin on the blinders.

In case you’re unfamiliar with this phrase, it means to be unaware of a situation or event that is right before one’s eyes. By the way, blinders are leather pieces that limit a horse’s peripheral vision.

What does this have to do with making money online? Well, one example would be analytics and metrics. Depending on your exact business this can vary. But, at the minimum, you should be paying attention to the following;

• Website Bounce Rate
• Revenue and/or Leads Per Visitor (RPV or LPV)
• Cost per Lead (CPL) and/or Cost per Conversion (CPC)
• Number of Leads
• Lead Conversion Rate
• Sales or Leads from Emails
• Email List Size
• Visits & Sales [and/or Leads] from Social Media
• Total Sales

Furtermore, you should also be listening to feedback from your customers — both good and bad. I would also recommend scoping out the competition to see what they’re doing right and wrong.

And, I would be remiss if I didn’t mention taxes and liability. Depending how your business is structured, this will influence the taxes you owe, as well as assest protection.

Frequently Asked Questions About Making Money Online

What is the best way to make money online fast?

Despite our desire to earn money as fast as possible, these gigs do take time to develop and grow an online business. In most cases, you can make good money in less than a month. Everything depends on how much marketing and effort you put into promoting your business.

How do I make money advertising online?

By placing ads inside your content, you can make money as a content creator. You can use Google AdSense for this. As a rule of thumb, the amount of ad revenue you earn from your webpage is directly related to the number of views it receives.

How do I make money writing online?

Many freelance opportunities are available for writers online, such as writing books, blogging, and more. In addition to building networks, earning followers on social media, and learning industry-specific skills, self-employed writers should become experts in their field.

Where can I sell art online?

For artists who wish to sell their work online, websites such as Redbubble and Zazzle are great options. All the artists need to do is upload their designs to these sites, which are entirely free of charge and simple to use. The company handles everything else, from shipping and returns to customer service. Furthermore, you can sell your artwork on Etsy, Amazon, or even create your own website if you decide you want to be in full control of the product.

Is it guaranteed that I will make money?

Making money is not a guarantee. However, if you don’t make the mistakes listed above, you can drastically increase the chances of making money online.

This post was originally published here.

The post Things to Stop Doing if You Want to Make Money Online appeared first on ReadWrite.

I’m not going to mince words about this. When it comes to finances, a lot of people are struggling. According to a survey by NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health, nearly 40% of US households experienced serious financial difficulties in 2021, including the inability to afford medical care and food.

Obviously, COVID-19 played a role in this. However, prior to the pandemic in 2019, a whopping 70% of Americans reported that they were struggling financially. While numerous external factors have contributed to our financial troubles, one component is not having a strong financial foundation.

For example, you could be considered low-income. But, that doesn’t mean that you’re financially unhealthy. If you live within your means and aren’t buried under debt, you may actually be better off than someone making six figures who blow their money on liabilities.

What is a Financial Foundation?

In order to design, build, and live the life you desire, you need financial security and stability as a foundation. As a matter of fact, building a financial plan is similar to building a house. To hold up your needs throughout your lifetime, they both require a strong foundation.

So, going back to comparing a low-income but financially healthy individual to a six-figure person squandering their money. You could build a structural sound home designed to withstand the elements. Even though it might not be the biggest or more luxurious home in the neighborhood, its foundation is much stronger and more durable than the McMansion comprised of cheap materials.

Overall, having a solid financial foundation provides a sense of financial freedom. How? Because it can help you stop living paycheck to paycheck and eliminate debt. From there, you begin accumulating wealth so that you can actually achieve your goals, like being able to quit your dead-end job or retire comfortably.

While this may sound daunting, building a solid financial foundation can be broken down into smaller building blocks. Doing so makes this process more manageable.

Moreover, establishing a solid financial foundation requires time. It’s also important to build a financial foundation that provides for you now while ensuring you can achieve your future goals. That requires being thoughtful and responsible with your daily spending habits.

With all that being said, here’s how you can your foundations in personal finance.

Get to know your current spending habits.

To begin with, you need to understand your current financial situation. Examine your bank account and credit card statements to see what purchases you’ve made in the past few months. Next, group them into the following three buckets;

50% goes to needs.

This includes bills, groceries, transportation, housing, minimum debt payments, work clothes, and other necessities.

30% on discretionary expenses.

Expenses for entertainment, clothing, dining out, and personal care should not exceed 20 percent of your income each month. Depending on your situation, you might decide to cut these expenses first if you spend more than you earn.

20% goes to “Future You.”

Investing, saving, and paying off debt over and above the minimums are included in this category.

You should also add voluntary withholdings to your list based on your recent pay stubs. Also, insurance premiums are needs, while any 401(k) contributions you make go in the “Future You” bucket. The rest of your withholdings are at your discretion. For example, you might withhold your public transit benefit, and you might also cancel your gym membership.

Finally, add up all the numbers. What is your monthly spending on each bucket? It doesn’t matter what the answer is, so don’t beat yourself up. This exercise isn’t supposed to make you feel bad. Instead, it’s designed to provide you with some perspective on your finances.

Also, you don’t have to follow the approximately named 50/30/30 to a tee. In fact, there are several other variations, such as 60/20/20, 70/20/10, or 80/20 you can try. The jest here is that you need to compare your income with your expenses so that you can budget accordingly.

Identify and plug spending leaks.

Continuing with the last point, compare how much you spend with how much you earn. Why is this important?

The first reason is if you spend more than you earn, you can start looking for ways to correct the situation. Maybe you might temporarily need to limit your spending to just the essentials. It may also mean making more conscious decisions like skipping your daily latte in favor of homebrew or reducing your ATM usage.

Alternatively, you might want to consider ways to supplement your income. Some suggestions would be asking for a raise, searching for a better-paying job, or picking up a side hustle.

Second, you’ll know exactly how much leftover you have at the end of each month once you’re spending less than you earn. These are the funds you’ll use to complete the building blocks.

As for now, you’ve pretty much-accomplished everything you need to do to create a written budget. Maintaining a monthly budget is a surefire way to make sure that your money is being used as you intend.

Save and stash any “extra” money.

Are you expecting a tax refund or salary increase? Set that money aside. And, whenever you get a raise, don’t go overboard with your spending. Put the extra money in your savings account.

The same holds true when you pay off a debt. As an example, suppose you paid $50 a month on a credit card and it’s finally paid off. Take that $50 and deposit it in a savings account.

But, don’t be content with just a savings account. Why? According to Bankrate’s March 2, 2022 weekly survey of institutions, the national average interest rate for savings accounts is a meager 0.06 percent.

As such, if you’re ready to step up your savings, consider the following three factors when deciding on where to stash your cash;

Accessibility.

Emergency situations are something you can’t anticipate, so you want to have access to your money, but it shouldn’t be too easy to access. You should open a new account specifically to handle emergency situations. Simply designating money in your checking account can tempt you to take money out of it impulsively.

Safety.

Make it a point to safeguard your money. A stock market investment, with all its ups and downs, does not provide any guarantee that the money will be there when needed. Keeping it somewhere stable, where it has no depreciation risk, is the best choice.

Profitability.

It’s important that your money doesn’t sit idle. The cost of living expenses for three to six months can add up to a substantial amount of money. Avoid the “under-the-mattress” strategy and instead invest in an account that offers a good rate of return.

By looking at these three items, traditional bank savings accounts are not a good match. While they’re accessible and safe, you won’t earn anything on your deposits. You might be better off storing your cash with an alternative, like a money market account that yields high-interest rates.

Also, establish recurring transfers from your paycheck to special savings accounts to make saving easier.

Eliminate debts that drag down your financial health.

“If you have debt, allocating some of your cash flow to paying down those balances is the next step in building a strong financial foundation,” suggests Kali Hawlk for Credit Karma.

Perhaps you have heard of “good debt versus bad debt” and wondered how any debt can be considered good.

Generally, “good debt” is debt that can help you gain an asset with your money. “A mortgage, for example, is debt, but it allows you to buy a home today and pay it off over decades,” adds Hawlk.

As a result, your basic human need for shelter is met by the home. Additionally, you can use your house as an asset if you rent it out, earn income from it, or sell it at a higher price if its value increases over time.

In contrast, credit card debt is a type of “bad debt”, since it does not allow you to build assets. Rather, it is just money you must repay with interest.

“Getting rid of any debt with no corresponding asset is essential to financial success because it naturally increases your net worth and frees you up from cumbersome payments,” notes Katie Brewer, CFP® and founder of financial coaching service Your Richest Life.

CNBC reports that the average American owes $90,460 in consumer debt, including credit cards, personal loans, mortgages, and student loans. As such, this may indicate that many people suffering from such high balances have difficulty paying them off.

If you’re ready to pay off your debt once and for all, where should you start? Here are a few suggestions.

Get organized.

List all the debts you need to pay off in one location. The source of the debt, the amount owed, and the interest rate should be noted.

Pick a payment plan.

Making debt freedom a reality may require you to make some changes to your lifestyle and budget. “You can either prioritize [debt repayment] by interest rate and pay off the ones with the highest interest rate first, or prioritize it by smallest balance to largest balance and pay off the smallest balance first to get the momentum going,” Brewer says.

Take a break from your credit cards.

Taking a break from your credit cards could be a good idea if you find it difficult to pay off credit card balances. Brewer recommends setting aside cash in an envelope or using a debit card.

Plan for your retirement now.

During your golden years, having a large number of assets can help you maintain a happy and healthy retirement. It is important to start saving as soon as possible for retirement — even if it may seem like it is a long way off.

Take a look at whether your company matches your contributions if it has a 401(k). Contribute at least enough to get matched by your company if it will match any part of your contribution. If not, you’re essentially missing out on free money.

In addition to employer-sponsored retirement plans, you might want to consider an IRA. With an individual retirement account (IRA), you can save for retirement while taking advantage of tax benefits. Unlike a traditional IRA, a Roth IRA is funded with after-tax dollars. Depending on your tax situation, you can choose a Roth IRA or a Traditional IRA.

Once you’ve maxed out your 401(k) contributions, you may want to buy an annuity. It’s a great way to supplement your retirement income by providing guaranteed recurring payments.

Get your feet wet with investing.

Over time, you can build wealth by investing in the stock market. Investing over the course of decades is by no means a get-rich-quick scheme, but it can create a valuable portfolio if done consistently.

To start, go to any brokerage platform you like. There are several good options to consider including Vanguard, Fidelity, M1, and Robinhood. As soon as you have the opportunity, you can open an account and start investing.

Make sure you create your own investment strategy and investment policy statement before you invest in the market. The long-term goals in your strategy should drive your policy statement, which serves as a guide during market upheavals. There is a good chance that your stock market portfolio will fluctuate, so you need to be prepared for those peaks and valleys. When the market is volatile, avoid panic selling to avoid some possible disasters. Do not sell until your policy statement permits you to do so; stick to your investment plan.

Protect your assets and income.

The most valuable resource you possess is your earning potential. In your twenties and thirties, disability and death might be the last things on your mind. However, it’s during those times that you should take the most precautions to ensure you will not lose your lifetime earnings to your family.

As such, take the following steps to ensure these policies are in place for you.

• Disability insurance. Over your working years, you are three and a half times more likely of getting injured or become disabled due to illness than of dying. In the event of an accident or becoming unable to work, disability insurance can help make sure you can maintain your standard of living.
• Life insurance. When you die prematurely, your survivors are protected by life insurance. In addition to a death benefit, permanent life insurance policies accumulate cash value over time. Eventually, you could access that money for an unexpected house repair or college expenses. You can also use the cash value in retirement if you no longer need the full death benefit.
• Property/casualty insurance. The property/casualty insurance protects you in case you cause an accident that results in injury or damage to another person or their property. It will also protect you if someone without insurance or inadequate insurance injures you.
• Estate plan. Creating or updating an estate plan, which is a document that outlines how your possessions will be handled after you die. Among the features of an estate plan are naming your heirs, dividing up your assets, creating a trust, and assigning guardians to minor children.
• Balance your portfolio. As you diversify your portfolio, the less risky it becomes; if any one type of asset proves to be underperforming, there will be plenty of other assets to compensate for it.

Frequently Asked Questions About Personal Finance Foundations

1. What is personal finance?

Personal finance is all about managing your short- and long-term financial affairs. In addition to the products and services that are designed to help individuals manage their finances, the term also refers to an entire industry.

2. Why is personal finance important?

You cannot manage your financial needs on a day-to-day basis without a personal finance plan. When you have a good grasp of personal finance, you will have a better chance of investing and planning for retirement in the long run.

If you understand personal finance, you are better prepared to create a plan for improving your finances. Having this understanding will help you budget based on current needs while planning for the future.

3. Is your emergency fund sufficient?

Keep three to six months’ worth of living expenses in your emergency fund, as recommended by experts. Emergency funds will vary depending on factors such as;

• Your lifestyle
• Your area’s cost of living
• The income you earn and the security of your job over time
• Job opportunities in your field
• Affordability of your health insurance

For example, if your monthly living expenses are roughly $4000, your emergency fund should consist of $12,000 to $24,000.

4. What’s your net worth?

The cash surplus (or deficit) you have in your bank account each month serves as a measure of what direction your financial health is heading in the short term. Your net worth offers a broader view of your financial standing.

If you have student loans, credit card balances, or other such debt, keep track of your 401(k) balance, home equity, and assets and reduce them accordingly.

5. Are you ever done saving?

Simply put, no.

Periodic expenditures such as routine vehicle and home maintenance, vacations, and special occasion gifts should be covered by your savings account.

Also, you should have regular savings to cover acute emergencies, such as paying off a credit card debt or replacing your car’s tires. You can’t always predict when these things will occur, so you should still plan for them because they won’t be true emergencies.

This post was originally published here.

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Founded in 2007, Penserra is an institutional financial services firm. They have offices located in New York, Chicago, Newport Beach, Calif., and the San Francisco Bay Area.

Additionally, Penserra is also a certified minority-business enterprise (MBE). Their services include global equity trading, fixed income trading, investment banking, ETF sub advising, and active investment management.

New Partnership Expands Access to Cash Management Solutions

Recently, the company announced the launch of new dedicated share classes offered by BlackRock Global Cash Management. These new share classes are the BlackRock Liquid Environmentally Aware Fund (PSLXX) and the BlackRock Liquid Federal Trust Fund (PSBXX). However, they will be available exclusively for clients of Penserra and its affiliates beginning January 21, 2022.

The partnership with BlackRock allows Penserra’s clients to have access to expanded offerings of cash management solutions. Of special interest are those which emphasize environmental considerations and positive social outcomes through education. All of these concerns are prioritized while seeking to conserve principal and liquidity.

Social Responsibility + Profit: Another Win-Win

“For over a decade, BlackRock has proactively engaged with minorities, women, and disabled-veteran owned broker-dealers. We seek to accelerate their growth as strong liquidity providers and distribution partners,” says Tom Callahan, global head of BlackRock Cash Management. “Working with Penserra to distribute cash management solutions to our mutual clients is a natural next step in our partnership. Consequently, we are proud to associate with a firm that shares our commitment to diversity and inclusion.”

“The opportunity to build a business on the strength of this platform with BlackRock is exciting,” said Jorge Madrigal, Penserra’s chief executive officer. “This partnership  expands the long relationship between our two firms and provides our institutional clients quality cash and investment strategies as we together strive to set the standard  for excellence in this area.”

To sum up, this latest deal further demonstrates that responsibility and profits can go hand-in-hand. As investors continue to express interest in companies that blend social and environmental concerns with profitable ventures, look for additional companies to emulate the Penserra-BlackRock partnership.

Image Credit: Penserra Financial Partnership; Thank you!

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